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(Adds strategist comment, updates prices to close)
* TSX ends down 21.37 points, or 0.16 percent, at 13,358.11
* Seven of the TSX's 10 main groups fell
By Alastair Sharp
TORONTO, March 24 (Reuters) - Canada's main stock index fell to a two-week low on Thursday before paring some losses, as bank stocks retreated amid rising chatter from U.S. central bankers about hiking interest rates and as a recovery in oil prices helped energy stocks.
Another U.S. interest rate hike "may not be far off," St. Louis Federal Reserve President James Bullard said on Thursday, the latest Fed official to speak in support of rate hikes this year after the Fed stood pat last week.
"That's caused the market to pull back a bit," said Allan Small, a senior investment advisor at HollisWealth.
But while the Canadian index ended in the red, it pared much of its early losses on a recovery in the price of oil after a renewed drop in U.S. oil rigs.
"The reversal coincided with the rig count in the U.S. that came out," Small said. "That's helped; the price of oil has come back a little bit and so have some markets."
The Toronto Stock Exchange's S&P/TSX composite index ended down 21.37 points, or 0.16 percent, at 13,358.11. It touched its lowest since March 7 at 13,255.47.
The energy group climbed 0.9 percent, with Canadian Natural Resources adding 1.3 percent to C$35.22, Suncor Energy Inc up 0.8 percent at C$35.86 and pipeline operator Enbridge Inc up 0.6 percent to C$49.57.
The most influential weights were bank stocks, including Royal Bank of Canada, which fell 1.3 percent to C$73.97, and Bank of Nova Scotia, which declined 1.3 percent to C$62.42. The heavily weighted financials group fell 1 percent.
"We've seen a pretty good run in the banks back to a more respectable price level," HollisWealth's Small said. "I think they still have more room to run up and I would be a buyer definitely if this weakness continues."
Barrick Gold Corp will face a class-action U.S. lawsuit regarding its now halted Pascua-Lama gold-mine project on the border of Argentina and Chile.
Nonetheless, the stock rose 2.4 percent to C$17.96 as spot gold stabilized after hitting a four-week low.
The overall materials group, which includes precious and base metals miners and fertilizer companies, added 0.7 percent.
Bombardier Inc gained 0.8 percent to C$1.33 after a company executive said talks with the Canadian government about financial support are "going well".
Canadian Pacific Railway declined 0.4 percent to C$171.15 after it was sued by a grain trading company over 2013 and 2014 service disruptions. (Reporting by Fergal Smith; Editing by Lisa Von Ahn and James Dalgleish)