CANADA STOCKS-TSX rallies as N. Korea tensions ease; financials lead

* TSX up 127.21 points, or 0.85 percent, to 15,160.59

* Nine of the TSX’s 10 main groups were up

TORONTO, Aug 14 (Reuters) - Canada’s main stock index rose on Monday as investors jumped back into riskier assets as some tensions eased over North Korea, with heavyweight financials leading gains.

The Toronto Stock Exchange’s S&P/TSX composite index mirrored global markets, which rebounded from their biggest weekly losses of the year, after U.S. officials played down the likelihood of a nuclear conflict with North Korea. Last week’s retreat to safety came after a war of words between the leaders of the two countries.

The most influential movers on the index included Royal Bank of Canada, which rose 1.2 percent to C$93.60, and Bank of Nova Scotia, which advanced 1.1 percent to C$77.47. The financials group gained 1.1 percent.

At 10:33 a.m. ET (1433 GMT), the TSX rose 127.21 points, or 0.85 percent, to 15,160.59.

Half of the index’s 10 main groups rallied more than 1 percent. The materials group, home to resource firms including gold and lumber producers, was the only decliner among the key sectors.

Energy stocks climbed 0.2 percent as oil prices steadied, with Enbridge Inc up 1.4 percent to C$50.75. Transcanada Corp advanced 1.3 percent to C$63.33.

Industrials rose 1.4 percent, with the country’s biggest rail operator, Canadian National Railway rising 1.6 percent to C$102.51.

The materials group slipped 0.1 percent as the price of gold, which hit two-month highs last week as investors sought safe havens, fell around half a percent after the weekend passed without further inflammatory words over North Korea.

The precious metal was also under pressure from a stronger greenback, which rose against a basket of currencies, making dollar-priced gold costlier for non-U.S. investors.

Barrick Gold Corp fell 1.5 percent to C$21.27, while Goldcorp Inc was down 1.7 percent to C$16.21.

Lumber producers also fell, with West Fraser Timber Co Ltd down 4.3 percent to C$62.69 and Interfor Corp sliding 5.8 percent to C$18.14. BMO Capital Markets downgraded both companies to “market perform,” saying prospects for a near-term settlement of the U.S.-Canadian lumber dispute have faded.

The Canadian government’s goals for talks on modernizing the North American Free Trade Agreement include preserving the pact’s dispute-settlement mechanism, Foreign Minister Chrystia Freeland said, setting up a potential clash with the United States.

Advancing issues outnumbered declining ones on the TSX by 168 to 75, for a 2.24-to-1 ratio on the upside. (Reporting by Solarina Ho; Editing by Meredith Mazzilli)