TORONTO (Reuters) - Toronto's main stock index rose for a third straight session yesterday as concerns eased about euro zone debt problems and their impact on economic recovery.

The index's big energy, materials and financial groups led the charge higher after Spain outlined measures to cut its deficit, which quieted fears that the Greek debt crisis could spread to other countries in Europe.

Suncor Energy rose three percent to C$32.91, First Quantum Minerals rallied 5 percent to C$73.60, and Royal Bank of Canada was up 1.8 percent at C$61.13.

The Toronto Stock Exchange's S&P/TSX composite index finished the session up 195.47 points, or 1.63 percent, at 12,196.08, with all its 10 main groups higher.

Last week the index dived 4.2 percent on euro-zone contagion fears.

"After duck and cover last week people are coming back on the bandwagon," said Francis Campeau, broker at MF Global Canada, in Montreal.

Investor anxiety about Europe's debt problems were not totally erased, however. Safe-haven US gold futures hit a record high above $1,240 an ounce yesterday.

In Toronto, shares of Kinross Gold climbed 2.6 percent to C$19.66.

Canada's dollar climbed for a fourth straight session against its US counterpart yesterday, boosted by rallying equities and easing fears that sovereign debt problems could spread in the euro zone.

The currency touched a high of C$1.0154 to the US dollar, or 98.48 US cents, as global shares rose after Spain outlined measures to cut its deficit, allaying fears about Greek debt crisis contagion.

But the currency pulled back from its peak level as oil prices dropped after government data showed rising U.S. inventories.