4 Min Read
* TSX jumps 90.87 points, or 0.69 percent, to 13,324.94
* Gold-mining stocks surge on record gold price
* Bernanke's testimony has mixed impact on equity market
* "Death cross" signal flashed (Updates and adds details)
By Ka Yan Ng
TORONTO, July 13 (Reuters) - Toronto's main stock index finished higher on Wednesday, led up by a sharp rise in gold-mining shares as investors sought safe havens.
The price of gold surged to a record high near $1,590 an ounce as the possibility of more U.S. Federal Reserve stimulus measures coupled with Europe's deepening debt crisis fueled bullion's longest winning streak in five years. [ID:nL6E7ID0A7] [GOL/]
Gold-mining issues have risen with the price of the precious metal in recent sessions, but the pace has been very tempered. On Wednesday, investors -- made anxious by Fed Chairman Ben Bernanke's suggestion that the Fed would consider additional measures to support the economy if the outlook gets worse -- were much quicker to push up gold miners, and the index's global gold subgroup surged 2.49 percent.
"Investors are now jumping into that sector with both feet," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
Three gold miners were among the top five most influential advancers. Barrick Gold (ABX.TO) was up 2.55 percent at C$46.62, while Goldcorp (G.TO) soared 2.54 percent to C$52.12. Eldorado Gold (ELD.TO) jumped 5.84 percent.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed 90.87 points, or 0.69 percent, higher at 13,324.94. Seven of the 10 main index sectors gained, led by a 2.15 percent surge in the materials group, home to gold miners.
A return of some optimism about the outlook for the global economy also helped support the Toronto market after data showed China's economy grew faster than expected in the second quarter, easing fears about a hard landing in the world's second-largest economy. [ID:nL3E7ID0AS]
The Chinese data drew some attention away from the euro zone debt crisis, where the latest blow came from Moody's, which downgraded Ireland's credit rating to junk status on Tuesday.
As did its U.S. counterparts, Toronto's main index rallied strongly, more than 1 percent to near its highest point in a week, soon after Bernanke's comments. But the gains faded in the afternoon as euro zone worries crept back into markets.
"The European situation is still the elephant in the room," Picardo said.
BMO Capital Markets noted on Wednesday that the TSX's 50-day moving average has now crossed below the 200-day average, creating what is known as the "death cross", which is sometimes a signal of a bear market. But the death cross also occurred last summer and through the 2002-07 bull market without bearish results.
"In fact, we've seen this technical pattern 14 times since 1990, and only on four occasions has it precipitated a 20-percent-plus decline -- that's less than a third of the time," BMO Capital Markets economist Robert Kavcic said in a client note.
"Bear markets always see the death cross, but the death cross does not always signal a bear market."
($1=$0.96 Canadian) (Reporting by Ka Yan Ng; editing by Peter Galloway)