(Updates with market open)

By Ragini Mathur

Dec 20 (Reuters) - Canada's main stock index bounced

back on Friday, though it seemed headed for its biggest weekly

drop in more than a year, as investors fretted about the

direction of global interest rates in the coming year, a

possible U.S. government shutdown and slowing global economic

growth.

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

rose 0.7% to 24595.68 points by 10:34 ET (1534 GMT),

up for the first time in seven sessions.

Gold miners and material shares led

a recovery in Canadian stocks at the end of a volatile week in

global markets.

"Wednesday's Fed meeting certainly put some fear into

the markets that inflation is not tamed to the extent that we

would like to see and there is a threat of fewer interest rate

cuts going forward," said Michael Sprung, president at Sprung

Investment Management.

"There is a fair amount of uncertainty, not the least to

say that in Canada and now in Europe. The threat of tariffs is

shaking confidence in the economic outlook of those areas."

The Fed on Wednesday

cut

its policy rate by 25 basis points as expected but forecast

only two rate reductions in 2025, in a nod to the economy's

continued resilience and still-high inflation.

Investors were also grappling with the possibility of a

partial U.S. government

shutdown

and political uncertainty in Canada after Finance Minister

Chrystia Freeland stepped down earlier this week, citing

differences with Prime Minister Justin Trudeau on managing

finances.

New Finance Minister Dominic LeBlanc

said

the country's financial reserves are sufficient to support

businesses and individuals if the United States imposes a major

new tariff.

Canada's retail sales in October were marginally lower

than expected as a jump in new car sales offset consumers'

reduced purchases at supermarkets, grocery stores and wine

shops, data

showed

.

Among single stocks, BlackBerry's shares surged

16.8% after the security software firm beat quarterly revenue

estimates.