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(Adds portfolio manager quote, details on consumer discretionary and financial stocks, updates prices)
* TSX closed up 32.23 points, or 0.25 percent, at 12,845.63
* Eight of TSX's 10 main groups ended higher
TORONTO, Feb 22 (Reuters) - Canada's main stock index rose on Monday as energy shares rallied on a jump in oil prices, although gains were pared as the healthcare sector slumped and bank stocks reversed course ahead of quarterly earnings this week.
The index touched its highest since the start of the year before losing some momentum and surrendering some recent outperformance against U.S. markets.
It has fallen 1.3 percent year-to-date compared with a 4.8 percent drop for the S&P 500.
The market paused ahead of bank earnings this week and "to see whether oil is going to continue upward," said Irwin Michael, portfolio manager at ABC Funds.
Major oil sands operator Suncor Energy Inc gained 3.1 percent to C$33.89 and Canadian Natural Resources rose 2.7 percent to C$28.84, while the overall energy group climbed 2.8 percent.
Oil markets settled up as much as 6 percent as speculation about falling U.S. shale output and a rally in equities fed the notion that crude prices may be bottoming after a 20-month collapse.
Consumer discretionary stocks rose 1.3 percent, led by a 3.3 percent gain for Magna International Inc to C$48.67.
The materials group, which includes precious and base metals miners and fertilizer companies, gained 0.4 percent.
Teck Resources Ltd advanced 14.5 percent to C$9.33, extending a sharp rally in recent days.
Barrick Gold Corp shares gained 1.7 percent to C$17.55 after the world's largest gold miner said it would spend about $2 billion on projects in Nevada and Peru for construction starting in 2019.
The Toronto Stock Exchange's S&P/TSX composite index closed up 32.23 points, or 0.25 percent, at 12,845.63. It touched its highest since Dec. 31 at 12,984.72.
Eight of the index's 10 main groups ended higher.
The overall financials group fell 0.5 percent as Moody's warned that the oil price slump will strain the profitability at Canada's largest banks.
Bank of Montreal, which will be the first of the main six banks to report when it releases its results on Tuesday, fell 0.7 percent to C$73.87.
Royal Bank of Canada fell 1.1 percent to C$70.49, while Bank of Nova Scotia ended down nearly 1 percent at C$55.48.
Valeant Pharmaceuticals International Inc suffered its second consecutive session of steep declines, falling nearly 11 percent to C$104.16, pushing the healthcare sector lower. (Reporting by Alastair Sharp; Editing by Paul Simao)