(Adds portfolio manager comment, updates prices to close)
* TSX settles up 37.94 points, or 0.26 percent, at 14,864.03
* Index rises 2.1 pct on the week
By Alastair Sharp
TORONTO, Nov 18 (Reuters) - Canada's main stock index rose on Friday, closing out a strong week with boosts from energy and banking stocks as oil prices moved higher and investors reacted to rising bond yields.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE settled up 37.94 points, or 0.26 percent, at 14,864.03, with the energy group finishing up 1.1 percent and financial stocks adding 0.6 percent.
"Banks look like they are trading at average valuations, but if you believe that the yield curve is going to steepen and rates are going to go up you'd expect a pick up in their earnings," said Manash Goswami, a portfolio manager at First Asset Investment Management Inc.
Toronto-Dominion Bank TD.TO rose 0.8 percent to C$63.27 and Royal Bank of Canada RY.TO added 0.5 percent to C$82.27.
Goswami said that strong overall revenue and earnings growth so far in the third quarter, along with some improvement in economic data, suggested the index could push higher from here.
It gained 2.1 percent on the week.
The most influential gainers on the day included Suncor Energy Inc SU.TO , which rose 1.4 percent to C$41.81, and Canadian Natural Resources Ltd CNQ.TO , up 1.7 percent at C$43.09. Encana Corp ECA.TO advanced 3.1 percent to C$15.78.
The Canadian energy industry is expected to broadly benefit from the U.S. presidency of Donald Trump, who has said he would approve the Keystone XL pipeline that would give Canadian crude better access to U.S. markets.
Oil prices settled higher on the day and gained 5 percent on the week after four weekly falls, buoyed by renewed hopes that OPEC will find a way to cap production at the end of the month. O/R
The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.7 percent as copper fell sharply and gold hit its lowest since May. MET/L GOL/
Diversified miner Teck Resources Ltd TCKb.TO was among the heaviest weights, down 2.1 percent to C$30.80, while Kinross Gold Corp K.TO fell 4.4 percent to C$4.58.
Canada's annual inflation rate picked up in October, but economists did not expect the figures to alter the central bank's accommodative stance. ECONCA
The leaders of Mexico and Canada will hold talks this weekend on the potential impact a Trump presidency could have on the NAFTA trade pact, a source close to the matter said on Thursday.