TORONTO (Reuters) - Toronto's main stock index surged more than three percent in a broad rally yesterday after the US Federal Reserve cut its target for overnight interest rates to a record low range of zero to 0.25 percent and said it would do everything it can to chase away the economic gloom.

Every sector on the index save the relatively small health care group moved higher after the Fed announced the deeper-than-expected cut.

"If you look at the Fed statement, I would say they just told you that, in poker language, they just went all in," said Levente Mady, a broker at MF Global Canada in Vancouver.

"They're going to be throwing everything at this thing that they have available."

The Toronto benchmark's energy group added 4.01 percent, while the materials sector rose 5.57 percent. Financials rose 1.38 percent.

The S&P/TSX composite index itself rose 262.28 points, or 3.1 percent, to close at 8,724.11.

The price of gold, which rallied above $850 an ounce after the Fed's move, also gave support to the resource-heavy Toronto index.

Big gainers of the day included fertiliser producer Agrium, which rose 10.25 percent to end at C$41.72, as well as Agnico-Eagle Mines, which jumped 7.3 percent to finish at C$56.02.

Losers included Bank of Nova Scotia , which fell 2.9 percent to C$30.10, and Forzani Group , which dropped 9.2 percent to C$7.72.

Even though Scotiabank gave up ground, other financial services firms moved higher. Canadian Imperial Bank of Commerce rose 3.72 percent to C$49.90. Insurer Manulife rose four percent to C$21.13.

A number of Canadian financial institutions have been forced to issue equity to shore up their capital positions, which has been an overhang on the sector, said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"I think that once it's digested and if investors get a sense that the worst is over for the financial services, they'll come back," he said.

In the US, stocks also soared in wake of the Fed rate cut, with the Dow Jones industrial average jumping 4.2 percent, or 359.61 points, to end at 8924.14. The tech-heavy Nasdaq added 5.41 percent to finish at 1,589.89.