* Key Toronto index firms up after Tuesday's steep fall
* Nagging global economic concerns contain overall gain
* Energy sector leads index higher as oil prices rally (Adds details)
By Frank Pingue
TORONTO, Jan 21 (Reuters) - Toronto's main stock index was higher on Wednesday morning as a boost to energy shares from higher oil prices offset the drag on investor sentiment from worries about the global economy.
Higher prices for oil, a key Canadian export, helped the energy group to lead the index with a 1.96 percent gain and keep the TSX in positive territory after it bounced around the break-even level early in the session.
But after the TSX dropped nearly 4 percent on Tuesday, there was still much trepidation in the market.
"Everyone is still worried about the banks worldwide and to the extent that they can't expand credit because they have deteriorating capital, so people get worried and sell stocks," said Douglas Davis, chief executive officer at Davis-Rea.
"There's no good reason to step in here. Maybe the price of oil is looking a little better and that's positive. Any good news there helps Canada."
At 10:10 a.m. (1510 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 46.92 points, or 0.55 percent, at 8,551.85.
In the first 30 minutes after opening, the TSX rose as much as 1 percent and also fell as much as 0.45 percent.
Five of the TSX's 10 sectors were higher.
$1=$1.26 Canadian Reporting by Frank Pingue; editing by Peter Galloway