TORONTO (Reuters) - Toronto's main stock index rebounded yesterday as gold miners and financials were strong performers in a broad rally, one day after the index slumped on an unexpected Chinese interest rate hike.

Gold prices rallied as investors assessed the initial reaction to China's rate hike as overblown, while the greenback weakened, boosting US dollar-denominated commodities and sending the materials sector up more than one percent.

"It doesn't really indicate the depth of how much they're going to tighten," said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management, referring to China's rate move.

"The primary trend is investors are looking to scoop up shares in materials, gold, and companies that could benefit from quantitative easing (by the Federal Reserve), which at this point is still speculation," Mr. Zohny said.

Kinross Gold added 1.7 percent to C$18.59 and Teck Resources gained 3.24 percent to C$45.31.

Financials gained 0.72 percent, rising for a fourth straight session, helped in part by higher earnings at US bank Wells Fargo & Co. Toronto-Dominion Bank rose 1.12 percent to C$76.

The Toronto Stock Exchange's S&P/TSX composite index gained 79.37 points, or 0.63 percent, to 12,649.92, recouping nearly all of Tuesday's losses. Nine of the index's 10 main groups were higher.

Sentiment was also boosted by a suite of strong corporate earnings reports in the US, while the US Federal Reserve's Beige Book provided further evidence that additional monetary easing was coming soon.

On the downside, EnCana dropped 3.42 percent to C$29.13 after the country's largest natural gas producer reported third-quarter profit below market expectations, cut its 2010 production outlook and lowered its forecast for cash flow per share.

Canada's dollar climbed against its US counterpart for the first time in five days amid rising equities and raw material prices that suggest greater demand for risk assets. The Bank of Canada cut its economic outlook and said the withdrawal of monetary stimulus would be "gradual".