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* TSX finishes up 3.46 percent at 10,100.95
* Index plays catch-up after market closed on Monday
* Energy sector jumps 5.5 pct as crude rises (Adds details, quotes)
By Jennifer Kwan
TORONTO, May 19 (Reuters) - Toronto's main stock index rallied sharply on Tuesday, reclaiming most of last week's losses, as higher oil prices boosted energy issues and as the TSX caught up with a rise by U.S. stocks on Monday when the Toronto market was closed.
The energy sector jumped 5.5 percent to lead the market rally as oil prices hit a six-month high. Canadian Natural Resources (CNQ.TO) was up 7.1 percent at C$62.06, while Suncor Energy (SU.TO) climbed 4.2 percent to C$35.08.
After rallying nearly 3.9 percent earlier in the day, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE retreated slightly to finish up 338.10 points, or 3.46 percent, at 10,100.95, with all 10 of the index's main groups firmly in the black. The TSX was closed on Monday for the Victoria Day national holiday.
"It's a 3 percent catch-up from yesterday and basically 1 percent on its own," said Francis Campeau, a broker at MF Global Canada, in Montreal.
Tuesday's gains nearly recovered the resource-laden TSX's 4.6 percent loss for last week.
Market watchers said Toronto was largely playing catch-up with U.S. stocks, which rose 2.9 percent on Monday, partly because of stronger than expected results from Lowe's Cos Inc (LOW.N), the No. 2 U.S. home improvement retailer.
While U.S. stocks were mostly weaker on Tuesday, analysts said the markets held up well given U.S. data that showed a slide in housing starts and permits in April. [ID:nN19418875]
"The market is extremely resilient," said Campeau.
The resource-laden TSX got a boost from firmer commodity prices, with oil climbing more than 1 percent to settle at $59.65 a barrel as a flurry of U.S. refinery problems fueled supply fears. [ID:nSIN131895]
Gold was also firmer [nLJ936150], helping to boost the broader materials sector, which was up 3 percent.
In the commodities space, investors who feel "underweight" may be putting their money to work again to ensure they don't miss a market rally, said Rick Meslin, head of Canadian equities at UBS.
Generally, Meslin said the market "feels good."
"People are willing to take on risk here and I think the market is telling us now that's the prevalent view," he said.
Financials rose 3.7 percent as investors were reassured by news that several major U.S. banks are seeking to repay government bailout funds. [ID:nN19421829]
Elsewhere, Canada's top grain handler Viterra Inc VT.TO rose 2.9 percent to C$9.10. Viterra has agreed to buy Australia's ABB Grain Ltd ABB.AX in a $1.2 billion share and cash deal, giving Viterra access to growth markets in Asia. [ID:nNSYD33174]
$1=$1.16 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson