* TSX up 308.94 pts, or 2.6 pct, at 12,041.44
* TSX on course for biggest jump since Oct. 6
* Central banks move to ease market liquidity
* China cuts bank reserves in policy shift (Adds details, analyst comments)
By Jon Cook
TORONTO, Nov 30 (Reuters) - Toronto's main stock index hit a seven-week high on Wednesday, up more than 2.5 percent at midday as resource issues jumped on an agreement by global central banks to tackle the euro zone debt crisis and a move by China to ease credit strains.
Commodity prices, particularly for oil, gold and base metals, rose on renewed investor optimism for the global economy, lifting the TSX's heavily weighted materials sector by nearly 4 percent. [ID:nN1E7AT0GX]
The 19-commodity Thomson Reuters Jefferies CRB index .CRB was up nearly 1 percent on the day, but was still on course to finish November with a 2 percent loss after a dismal performance in the first three weeks of the month.
In Toronto, shares of miner Goldcorp G.TO were up 5.4 percent at C$53.98, and Barrick Gold ABX.TO gained 2.8 percent to C$52.90, leading the gold subsector's rise. The gains came as bullion prices climbed more than 2 percent in response to a falling U.S. dollar as central banks moved to inject more liquidity into the global financial system. [ID:nL5E7MU118]
At 1:04 p.m. (1804 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 308.94 points, or 2.6 percent, at 12,041.44. It was the index's biggest rise since Oct. 6.
The move by the TSX index mirrored hefty gains on other global markets as central banks from the world's leading economies, including the Bank of Canada, the U.S. Federal Reserve and the European Central Bank, agreed to lower the cost of dollar swap lines by 50 basis points, as well other measures. [ID:nN9E7LI02P]
"Santa has come early and he happens to look a lot like (U.S. Federal Reserve Chairman) Ben Bernanke, right down to the beard, and in his bag he has lots and lots of U.S. dollars available to exchange for euros in unlimited amounts," said Gavin Graham, president of Graham Investment Strategy.
"All the risk assets, whether it's gold or copper or oil or the Canadian dollar, are all shooting up and it's likely that we'll see a continuation of that (for the rest of the year)," Graham said.
Oil and gas issues continued their recent rally, jumping more than 3 percent as U.S. crude rose above $100 a barrel to its highest level in two weeks.
Suncor Energy SU.TO jumped 4.4 percent to C$30.52 to lead energy gains. Canadian Natural Resources CNQ.TO was also strong, rising 3 percent to C$37.46.
The global rally started early in the day when China's central bank moved to ease credit strains by cutting reserve requirements for its commercial lenders by 50 basis points, the first such drop in nearly three years. [ID:nL3E7J51YT]
The move, which is expected to free up funds that could be used for lending to cash-strapped small firms, came as China's economic growth has eased for three straight quarters due to tight credit at home and flagging demand overseas.
As well as the Chinese shift to an easier policy and the move by central banks, strong U.S. jobs data and better than expected Canadian third-quarter economic growth all helped boost market sentiment. The U.S. figures showed the private sector added more than 200,000 jobs in November. [ID:nN1E7AS1R7] [ID:nN1E7AT05Q]
Canadian equities markets were "internally very oversold" over the last 10 days as worries about European debt contagion led to repeated selloffs, said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets.
"You just needed a cause and you've got the catalyst this morning from China and from the coordinated effort of all the central bankers," Mokhtari said. "They needed to give it a jolt and they did, and the market's responding accordingly."
The TSX financial sector, which has little direct exposure to European debt assets, had its best jump in a month, rising 2.4 percent on the strengthened European outlook.
Royal Bank of Canada RY.TO led the way, gaining 3 percent to C$46.38.
The TSX might have risen higher if not for a technical glitch in the morning that froze trading of companies whose symbols started with the letters M to Z. The problem affected high-volume stocks such as Research In Motion RIM.TO and Sun Life Financial SLF.TO. [ID:nL1E7MU0WH]
In individual company news, TMX Group X.TO was down 2.8 percent to C$43.48 after the federal competition regulator said it has "serious concerns" about a C$3.8 billion proposal by Maple Group consortium to take over TMX, owner of the Toronto Stock Exchange.
($1=$1.02 Canadian) (Editing by Rob Wilson; editing by Peter Galloway)