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TSX rises 0.2% to 22,373.38

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Market shifts to one-day trade settlement

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Materials sector adds 1.2% as gold rallies

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Bank of Nova Scotia ( BNS ) set to report on Tuesday

(Updates at market close)

By Khushi Singh and Fergal Smith

May 27 (Reuters) - Canada's main stock index rose on

Monday as higher commodity prices boosted resource shares and

the market transitioned to a faster trade settlement standard,

while investors looked ahead to bank earnings reports this week.

The Toronto Stock Exchange's S&P/TSX composite index

ended up 52.51 points, or 0.2%, at 22,373.38, moving

closer to the record closing high it posted last Tuesday at

22,468.16.

Trading volume was lower than usual with U.S. markets closed

for the Memorial Day holiday.

"The U.S. is closed, commodities are running and investors

are waiting for bank earnings across the rest of the week, so

there is good reason for optimism in the Canadian market today,"

said Colin Cieszynski, chief market strategist at SIA Wealth

Management.

The materials group, which includes metal miners

and fertilizer companies, gained 1.2% as gold prices

rose.

"We expect gold prices to stay volatile, and price setbacks

to be shallow, targeting gold prices to test new record highs

later this year," UBS analyst Giovanni Staunovo said.

Energy also advanced, gaining 0.3%, as the price

of oil increased 1.1% to $78.55 a barrel.

Canada, Mexico and Argentina started to settle securities

trades in one day rather than two, in a move designed to reduce

counterparty risk and improve market liquidity. U.S. markets

will move to the new standard, commonly called T+1, on Tuesday.

Canadian wholesale trade rose 2.8% in April from March,

largely driven by higher sales in the motor vehicle and motor

vehicle parts and accessories subsector, a preliminary estimate

showed.

Bank of Nova Scotia ( BNS ) is due to report quarterly

earnings on Tuesday, while some of Canada's other major banks

report later in the week.

On Thursday, Toronto-Dominion Bank ( MLWIQXX ) reported

better-than-expected earnings even as its U.S segment struggled

amid probes related to its anti-money laundering program.