* TSX hits session high of 11,648.55 after Fed comments
* Fed says U.S. economy now in recovery
* Bank shares headline latest rally (Updates to mid-afternoon)
TORONTO, Sept 23 (Reuters) - Toronto’s main stock index hit a session high on Wednesday afternoon after the Federal Reserve said the U.S. economy was recovering from the severe downturn.
The S&P/TSX composite index .GSPTSE rallied as high as 11,648.55, for a gain of 62,82 points, in the aftermath of the Fed statement, before backing off slightly.
The rally was driven mostly by weighty financial shares, with Royal Bank of Canada (RY.TO) up 1.4 percent at C$58.44, and Toronto-Dominion Bank (TD.TO), ahead 1 percent at C$69.61.
The U.S. central bank, as widely expected, held overnight lending rates close to zero and repeated its intention to keep rates exceptionally low for an extended period.
It also said it would gradually slow the pace of its purchases of mortgage-related debt in order to promote a smooth transition in markets, but reiterated it would keep its options open. [ID:nN23390829]
“I don’t think there were any real surprises that came out of it,” said Bruce Latimer, a trader at Dundee Securities. “So we might even see (the TSX) drift higher into the close as the path of least resistance seems to be higher right now.”
By 2:50 p.m. (1850 GMT), the TSX was up 42.26 points, or 0.36 percent, at 11,627.99.
($1=$1.07 Canadian) (Reporting by Frank Pingue; editing by Rob Wilson)