* TSX up 115.40 points, or 1.01 pct, at 11,521.35
* Recovers from near 2 pct drop, lowest level since Feb.9
* Nine of 10 sectors higher
* Index down 4 percent for the week (Adds details)
By Jennifer Kwan
TORONTO, May 21 (Reuters) - Toronto’s main stock index ended a six-session losing streak on Friday, led higher by resources and bank shares, as some positive developments in Europe and recent price declines helped spur investor buying.
The resource-heavy index fought back from a 14-week low touched earlier on Friday, led by a 1.7 percent rise in the hefty energy sector, while materials moved up by 0.7 percent. Financials climbed 0.9 percent.
“We were due for a short-term trading bounce,” said John Johnston, chief strategist for Harbour Group at RBC Dominion Securities.
“The selloff was getting extended, which means in the short term maybe the bad news was getting a little over-discounted,” he said.
Key stocks on the upside included Teck Resources TCKb.TO, which rose 5.6 percent to C$33.75, and Suncor Energy (SU.TO), which rose 2.4 percent to C$31.19.
Talisman Energy TLM.TO was up 2.7 percent at C$17.40, and First Quantum Minerals (FM.TO) advanced 3.9 percent to C$62.79.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 115.40 points, or 1.01 percent, at 11,521.35, with the majority of its 10 main sectors lower. Earlier in the day, the index sank to 11,179.97, its lowest level since Feb. 9.
Despite Friday’s rally, the TSX was off 4 percent for the week as investor sentiment was beaten down by concerns that austerity measures in some euro zone countries would hurt European and global growth.
But confidence in the market edged higher on Friday after the head of the European Central Bank said the euro was not in danger, while German lawmakers backed a $1 trillion rescue plan for the euro zone, alleviating some of the concerns over sovereign debt levels and prospects for economic recovery. [MKTS/GLOB]
U.S. stocks also rallied on Friday as investors bought beaten-down shares including banks, a day after the U.S. Senate approved a sweeping overhaul of the regulation of Wall Street firms. [.N] [ID:nN20244272]
Investor willingness to take on more risk was also reflected in the Canadian dollar’s performance against its U.S. counterpart. The currency fought back from a 14-week low on rebounding equity markets and sturdy domestic data that kept alive the possibility of a June 1 interest rate hike. [CAD/]
Market strategists also pointed to relatively strong Canadian economic fundamentals.
Paul Gardner, partner & portfolio manager at Avenue Investment Management, said that while recent European developments have clouded the mood on the markets, the North American economy has fared better, particularly Canada where “the consumer is alive and well.”
The rally was supported by data that showed Canadian inflation was higher than expected in April, while retail sales in March soared from February. [ID:nN21216246]
Gold miners held back gains on the TSX, with bullion prices falling as improved risk sentiment sapped demand for the safe-haven precious metal.
The blue chip S&P/TSX 60 index .TSE60 closed 5.60 points higher, or 0.83 percent, at 679.78.
Canadian financial markets will be closed on Monday for Victoria Day.
$1=$1.06 Canadian Additional reporting by Ka Yan Ng; editing by Rob Wilson