CANADA STOCKS-TSX ends higher, helped by banks and energy shares

(Adds investor comment, updates prices to close)

* TSX ends up 98.19 points, or 0.75 percent, at 13,150.93

* Seven of the TSX’s 10 main groups rise

TORONTO, Aug 25 (Reuters) - Canada’s main stock index finished modestly higher on Tuesday after surging as much as 3 percent following China’s decision to cut interest rates and banks’ reserve requirement to kick-start economic growth.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 98.19 points, or 0.75 percent, at 13,150.93.

It had risen sharply at the open following Monday’s global rout, as the People’s Bank of China’s 25 basis point cut in key rates and 50 basis points off the reserve requirement rate for large commercial banks helped global markets rebound.

The index’s heavyweight financial and energy groups, up 2 percent and 1.5 percent respectively, helped steer it to a positive finish, as the price of oil recovered somewhat.

But jittery investors, knocked around by several sessions of sharp declines, were unwilling to make drastic moves.

“It’s emotion, it’s sentiment, and the market is getting pushed back and forth,” said Rick Hutcheon, chief operating officer of RKH Investments. “Let the tidal wave, the tsunami play itself out and then we’ll figure out what’s going on.”

Hutcheon said he has not sold a single share during the index’s plunge and is very tempted to buy in at these levels.

“As soon as I get some sense of sanity and rational decision making, that’s probably exactly what I’ll do,” he said.

Seven of the index’s 10 key groups gained, with 169 advancers and 78 decliners, for a 2.17-to-1 ratio on the upside.

“Even though the markets are up ... a lot of investors are still skeptical,” said Irwin Michael, portfolio manager at ABC Funds.

Banks, which report quarterly results this week, were the index leaders, with Toronto-Dominion Bank adding 2.7 percent to C$50.35. Royal Bank of Canada advanced 2.3 percent to C$72.36.

Bank of Montreal rallied 2.5 percent to C$67.82 after reporting a third-quarter profit that topped expectations.

Investors may have been too negative on bank earnings, said Michael, adding that BMO’s results could spark more optimism for other institutions reporting this week.

The financials group had tumbled 2.8 percent on Monday. Prior to Tuesday’s gains, it had fallen more than 9 percent through August.

Energy shares also gained after losing 9.4 percent last week and Monday. While U.S. oil rose 3 percent, prices still hovered near 6-1/2 year lows under $40 a barrel.

Suncor Energy rose 2.1 percent to C$33.62.

Additional reporting by Solarina Ho; Editing by Jeffrey Benkoe