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* TSX rises 204.21 points to 10,100.93
* Banks and insurers lead latest rally
* TSX still down 1.8 percent on the week (Adds details, comments and official numbers)
By Frank Pingue
TORONTO, June 24 (Reuters) - Toronto's main stock index shot higher on Wednesday after an OECD report said the global economic outlook has improved for the first time in two years.
The TSX index's financial group led the index higher with a gain of 2.74 percent after the Organization for Economic Cooperation and Development said the outlook has improved for the first time in two years. [ID:nLN270829]
That helped lift shares of Royal Bank of Canada (RY.TO) 3.2 percent to C$45.49, while insurer Manulife Financial MFC.TO followed with a gain of 4.2 percent to C$21.09.
The rise came after Tuesday's modest gain and Monday's 453-point selloff, which was spurred by a World Bank warning that prospects for the global economy remained "unusually uncertain". [ID:nSGP000012] Monday's drop was the TSX index's biggest point loss since December.
All 10 of the TSX index's sectors rallied on Wednesday after the OECD said that the slowdown in its 30 member countries was near the bottom.
"Investors are overreacting to both the bad news and the good news, which tends to be a characteristic of economies that are in the process of turning," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.
"So it's not just that people saw good prices, it's that they are really overreacting to the slight bit of good news today just like they overreacted to a bit of not so good news on Monday."
The S&P/TSX composite index .GSPTSE rose 204.21 points, or 2.06 percent, to 10,100.93. It is still down 1.8 percent on the week because of the steep Monday selloff.
$1=$1.15 Canadian Reporting by Frank Pingue; editing by Peter Galloway