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*TSX closes up 56.39 points, or 0.4 pct, at 13,295.86
*Energy, materials, financials all stronger (Updates to close, adds details, comments)
By Claire Sibonney
TORONTO, Dec 13 (Reuters) - Toronto's main stock index advanced for a third straight session on Monday as resource issues rallied with commodity prices on relief that China did not raise interest rates despite soaring inflation.
Oil reached above $89 a barrel, while copper hit record highs, boosted by economic prospects for China. The rising commodity prices lifted the index's powerhouse energy sector up 1 percent and its materials group up 0.2 percent. [O/R] [MET/L]
The gold subsector was also higher, up 0.5 percent, as the price of bullion firmed toward $1,400 an ounce on the back of a weaker U.S. dollar. [GOL/]
Key gainers included Suncor Energy (SU.TO), up 1.2 percent at C$36.63, Barrick Gold (ABX.TO), up 0.9 percent at C$54.32, and Ivanhoe Mines IVN.TO, which jumped 2 percent to C$24.73.
Beside stronger metal prices, Ivanhoe also benefited from its board approving a $2.3 billion capital outlay in 2011 to develop the first phase of its massive Oyu Tolgoi copper and gold project in southern Mongolia. [ID:nN13275249]
"Some of the (economic) numbers out of China were good and they didn't raise the bank rates so that gave the market a bit of a relief," said John Kinsey, portfolio manager at Caldwell Securities.
Data over the weekend showed that China's inflation rose past expectations to a 28-month high in November.
China's central bank extended an increase in reserve requirements for top banks over the weekend rather than raising benchmark interest rates, easing concerns that aggressive tightening could slow expansion in one of the major growth engines of the global economy. [ID:nLDE6BC0ET]
"The commodities, when they're doing well, we seem to do well, especially if the financials join in," Kinsey said of the index's rise.
The S&P/TSX composite index .GSPTSE closed up 56.39 points, or 0.43 percent, at 13,295.86, with six of its 10 main sectors higher, including heavyweight financials, up 0.5 percent.
Sun Life Financial SLF.TO advanced 2.2 percent to C$30.18, joining in the recent run-up in insurance companies as their profit picture was made brighter by rising interest rates and higher stock markets.
While the big six banks were all firmer, Royal Bank of Canada (RY.TO) lagged, only 0.1 percent higher at C$52.82 after Moody's Investors Service downgraded its debt due to concerns over its increased focus on capital markets. [ID:nN13204362]
In other individual company news, gold royalty company Franco-Nevada (FNV.TO) tumbled 3.8 percent to C$32.15 after announcing it will buy competitor Gold Wheaton GLW.TO -- which surged almost 14 percent to C$4.99 -- in a deal worth C$830 million. [ID:nN13196905]
Research In Motion RIM.TO dropped 2.3 percent to C$61.25 after Exane BNP Paribas cut its rating on the BlackBerry maker to "neutral" from "outperform". [ID:nWNAB8405]
($1=$1.01 Canadian) (Editing by Peter Galloway)