Source: The Canadian Press

The Toronto stock market racked up a solid gain Wednesday as investors set aside concerns about growing European debt problems and sent stocks higher across all sectors.

The S&P/TSX composite index gained 195.47 points to 12,196.08, while the TSX Venture Exchange gained 13.15 points to 1,625.73.

Markets have been on the rise since Monday, when the European Union announced an aggressive US$1-trillion plan to stop Greece’s debt problems from spreading across Europe. Investors had feared this could derail a global economic recovery and possibly destroy the euro.

Markets were encouraged by data showing that Germany’s economy, Europe’s largest, grew by a better-than-expected 0.2% in the first quarter as a global recovery boosted demand for its high-value exports.

“Data is good out of Germany,” said Sid Mokhtari, market technician at CIBC World Markets.

“A lot of folks are still thinking that fundamentals are still viable, in good standing. What we saw is a shock and the market is now absorbing it.”

And the news that Spain aims to cut its budget deficit by a further 1.5 percentage points to 6% of the country’s gross domestic product in 2012 has also helped calm jittery markets.

Spanish Prime Minister Jose Luis Rodriguez Zapatero outlined a raft of measures including cuts in public sector pay.

But some doubts remain about the EU rescue package, as shown by gold prices that moved further into record territory Wednesday.

The June bullion contract on the New York Mercantile Exchange ran up $22.80 to US$1,243.10 an ounce after going as high as US$1,249.20. This was the second record set by the yellow metal in two days amid speculation that the euro could still lose value as debt-burdened countries cut spending to reduce high debt. Investors have turned to gold as an alternative to currencies.

“Gold, I guess, is the second currency to the U.S. dollar, if you will,” added Mokhtari.

“That’s the way it’s behaving. So U.S. dollar is strong, gold is strong, so gold is certainly acting like a currency at this point.”

The TSX global gold sector was up modestly after charging ahead more than 5% Tuesday as Kinross Gold Corp. (TSX:K) added 50 cents to C$19.66.

Eldorado Gold Corp. (TSX:ELD) announced it is buying Brazauro Resources Corp. (TSXV:BZO) for $122.4 million in a share-swap deal. Brazauro owns the Tocantinzinho gold project in Brazil. Its shares jumped 60 cents or 86.96% to $1.29 while Eldorado shares moved up 23 cents to $18.27.

All TSX sectors were higher, with gains led by the tech sector, up 2.89% ahead of earnings after the close from networking and data centre giant Cisco Systems. Cisco reported adjusted net earnings of 42 cents a share, higher than the 39 cents that analysts expected. Cisco’s revenue came in at US$10.4 billion, better than the expected US$10.2 billion, but its shares drifted lower in after-hours trading.

On the TSX, Celestica Inc. (TSX:CLS) was ahead 50 cents at C$10.12 while CGI Group (TSX:GIB.A) gained 68 cents to $16.43.

Transportation stocks pushed the industrials sector up 2.68% as Canadian National Railways (TSX:CNR) was $1.73 higher at $62.43, while Bombardier Inc. (TSX:BBD.B) advanced 17 cents to $5.42.

The financials sector was ahead almost 2%. Bank of Montreal (TSX:BMO) was up $1.51 at $61.85 and CIBC (TSX:CM) was $1.66 higher at $74.14.

Power Financial Corp. (TSX:PWF), a Montreal-based holding company that owns Great West Lifeco, Investors Group and other major companies, said its first-quarter net profits doubled to $389 million on a sharp jump in revenues. Its shares drifted 21 cents higher at $29.59.

The base metal sector advanced 2.6% as the May copper contract on the Nymex edged two cents lower to US$3.19 a pound. FNX Mining (TSX:FNX) improved by 24 cents to C$12 while Teck Resources (TSX:TCK.B) gained $1.04 to $37.50.

The energy sector gained just shy of 2% even as the June crude contract in New York dropped 72 cents to US$75.65 a barrel amid data that showed crude oil inventories rose by 1.95 million barrels in the past week, greater than the forecast of 1.7 million barrels.

Suncor Energy (TSX:SU) was up 97 cents at C$32.91 and Imperial Oil (TSX:IMO) gained 98 cents to $42.58.

The Canadian dollar moved ahead 0.19 of a cent to 98.06 cents US as Canada’s trade surplus with the world narrowed to $254 million in March from $1.2 billion in February. Canada’s merchandise exports declined 0.7% in March as a result of falling prices for energy products, while imports grew 2% on the strength of precious metals.