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TSX ends up 0.6% at 24,748.98

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Energy sector advances 2%

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Materials group adds 0.7%

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Eight of 10 major sectors end higher

(Updates at market close)

By Fergal Smith

Dec 23 (Reuters) - Canada's main stock index rose on

Monday, led by gains for resource shares as the seasonal

optimism of investors offset an uncertain outlook for the

Canadian economy and domestic political uncertainty.

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

ended up 149.50 points, or 0.6%, at 24,748.98,

extending its rebound from a six-week low on Thursday.

U.S. markets also notched gains after a stopgap government

funding bill averted a U.S. government shutdown.

"We're seeing the beginnings of a 'Santa Claus rally' as

stocks continue to show strong momentum into year-end," said

Brandon Michael, senior investment analyst at ABC Funds,

referring to the tendency for stocks to advance in the period

around the Christmas Day holiday.

The TSX has climbed 18.1% since the start of the year.

Still, that is less than the roughly 25% advance for the S&P

500.

"While the TSX is up today, it's lagging behind, and that's

reflecting narrower breadth and a lack of exposure to

high-growth sectors like AI, robotics, and quantum computing in

Canada," Michael said.

"Additionally, the Canadian economy is facing challenges,

not being helped by the current political situation, and the

Canadian dollar is under pressure with the need for potentially

more aggressive rate cuts."

Minutes from the Bank of Canada's December meeting showed

the decision to opt for a larger than usual 50-basis-point

interest rate cut reflected a weaker outlook for growth than

forecast in October.

Canadian Prime Minister Justin Trudeau, whose party looks

set to lose power early next year, is under increasing pressure

from his own legislators to step down and let someone else take

over.

The energy sector rose 2% even as the price of oil settled

0.3% lower at $69.24 a barrel. The materials group, which

includes metal mining shares, also notched gains, advancing

0.7%.

Eight of 10 major sectors ended higher.