* TSX up 230.66 points, or 1.75 percent, to 13,381.59
* Nine out of the TSX's 10 main groups up
(Updates to close, adds quote, byline)
By Solarina Ho and Leah Schnurr
TORONTO/OTTAWA, Aug 26 (Reuters) - Canada's main stock index
racked up its biggest increase in seven months on Wednesday in
another volatile session as investors dove back into shares that
had recently sold off.
The TSX, which is heavily weighted with energy stocks, has
been hit by the slide in crude prices and was caught up in the
global market rout earlier this week that was fueled by concerns
about China.
Despite faltering during the day, Toronto stocks were able
to rally in the final hours of trading, helped by a nearly 4
percent surge in stocks on Wall Street. .N
The utilities sector .GSPTTUT , typically seen as a safe
haven, fared the best, rising 3.4 percent, while tech shares
.SPTTTK jumped 2.9 percent.
"The sentiment seems to be changing hour to hour," said
Bryden Teich, associate portfolio manager at Avenue Investment
Management, in Toronto. "The moves that we saw early in the week
were pretty violent."
"A lot of those more long-term defensive names that snapped
down early in the week, you're seeing bounce back up today,
that's what's helping push the market up," Teich said.
The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed up 230.66 points, or 1.75 percent, to
13,381.59. It was the biggest percentage gain since late
January.
Financial shares also contributed to gains despite a drop in
Royal Bank of Canada RY.TO after quarterly earnings that
showed a sharp spike in bad loans to the energy sector. RBC was
among the biggest drags on the index, down 0.4 percent to
C$72.1. ID:nL1N1110EG
But Bank of Montreal BMO.TO rose 4.8 percent to C$71.05
the day after its earnings topped estimates. The sector as a
whole .SPTTFS climbed 2.4 percent. ID:nL1N1100Q3
The materials sector was the only main group to decline as
gold producers dropped alongside the price of gold. Goldcorp Inc
G.TO fell 5.3 percent to C$17.46, while Barrick Gold Corp
ABX.TO declined 7.1 percent to C$8.72.
Although the end of the summer can exacerbate moves because
there is lower volume in the market, September will bring some
potentially important events, including interest rate decisions
from the Bank of Canada and the U.S. Federal Reserve, Teich
said.
"We're near-term in this little window of bouncing up and
down until things stabilize," he said, though any uncertainty
around those factors will add to volatility.
(Editing by Leslie Adler)