(Updates with analyst comment, market open prices)

By Nikhil Sharma

Aug 26 (Reuters) - Canada's main stock index rose on

Tuesday, boosted by financial shares, as investors greeted

strong results from Bank of Montreal ( BNKD ) and Bank of Nova

Scotia ( BNS ), kicking off earnings season for the top

domestic lenders.

At 9:51 a.m. ET (1351 GMT), the Toronto Stock Exchange's

S&P/TSX composite index was up 0.16% at 28,214.41

points.

The financials index, which has the biggest

weighting on TSX, jumped 0.56%, after BMO and Scotiabank

beat

third-quarter earnings estimates on the back of easing

trade tensions between Canada and the United States.

BMO and Scotiabank, which jumped 3% and 5%,

respectively, in early trading, benefited from

smaller-than-expected loan loss provisions.

"They've (bad loan provisions) been on a gradual trend,

mostly up over the past couple of years. So if we're seeing a

break in that trend, that would be a clear positive for banks

going forward and for the Canadian market in general," said Josh

Sheluk, portfolio manager at Verecan Capital Management.

Canada has stepped up its pursuit to reach a

potential deal

with Washington, most recently being the removal of several

retaliatory import tariffs on U.S. goods.

Global investors turned cautious after U.S. President

Donald Trump said on Monday he was firing Federal Reserve

Governor Lisa Cook over alleged improprieties in obtaining

mortgage loans.

Wall Street's main indexes slipped on the day. The move

marks yet another attempt by the president to jeopardise the

central bank's autonomy, potentially undermining investors'

faith in U.S. assets.

The dollar stumbled against major currencies on Monday,

helping gold to hit a more than two-week high. Toronto's

materials index rose 0.3%.

Industrials led gains, up 0.6%.

Overall gains, however, were limited by the energy index

that slipped 0.9% as it tracked a pullback in crude

prices.