(Adds analyst comment, updates market reaction, adds details on forestry and autos sector)
By Alastair Sharp
TORONTO, Nov 9 (Reuters) - Canada's currency pared some of its overnight losses while shares of energy producers and gold miners pushed its stock market up 1 percent as investors saw a Donald Trump presidency favoring the oil sector and potentially stoking inflation.
Some financial players also talked about increased prospects of a Bank of Canada rate cut to underpin growth which might be threatened by Trump's stance on trade, though the implied probability of near-term move held around 27 percent.
Energy stocks jumped 2.1 percent as bets that Trump might revive the Keystone XL pipeline boosted TransCanada Corp and the broader oil sands industry.
"Based on what he has said, I think this could be an overall benefit to the Canadian economy and Canadian stock market, to start with Keystone and then we can go from there," said Philip Petursson, chief investment strategist at Manulife Investments.
The materials sector, which includes gold miners, jumped 3 percent. Gold, which jumped nearly 5 percent at one point, was up about 1 percent.
The gold sector benefits from his win "because all of his policies are inflationary," said Diana Avigdor, head of trading at Barometer Capital Management.
At 12:01PM EDT (1701 GMT), the Toronto Stock Exchange's S&P/TSX composite index rose 134.18 points, or 0.92 percent, to 14,791.02.
But some sectors of the market saw heavy losses, including auto parts makers which depend on supply chains that cross borders. Trump has repeatedly attacked the outsourcing of American auto jobs.
Shares of Canada's Magna International Inc, whose Mexican operations account for about 14 percent of sales, fell 6 percent. Linamar Corp and Martinrea International Inc also fell more than 5 percent.
Forestry stocks also fell. The sector has been a significant source of trade disputes with the United States and Trump is not expected to be a flexible negotiator. West Fraser Timber Co Ltd fell 7.4 percent.
The Canadian dollar pared some losses after hitting an eight-month low against its U.S. counterpart earlier on uncertainty about the implications of a Trump win.
Trump has pledged to renegotiate or scrap the North American Free Trade Agreement, which could threaten parts of Canada's trade-intensive economy.
"From a G10 perspective Canada is bearing the brunt of this Trump victory," said Jack Spitz, managing director of foreign exchange at National Bank Financial, who added that market volatility had triggered active trading by clients.
At 11:11 a.m. EST (1611 GMT), the Canadian dollar CAD=D4 was trading at C$1.3447 to the greenback, or 74.37 U.S. cents, much weaker than Tuesday's close of C$1.3305, or 75.16 U.S. cents.
Canadian short-term government debt prices firmed but long bond prices fell, steepening the yield curve in sympathy with U.S. Treasuries. Investors weighed potential for the Federal Reserve to hold off from a rate hike in December and bet that Trump will enact policies that will increase inflation. (Reporting by Fergal Smith, Alastair Sharp, Solarina Ho, Allison Martell and Jeffrey Hodgson; Editing by Grant McCool and Andrew Hay)