TORONTO (Reuters) - Toronto's main stock index closed higher for a second consecutive session yesterday as ongoing optimism for a global economic recovery next year lifted shares across most sectors.

Weighty bank stocks did the bulk of the driving as shares of Royal Bank of Canada rose 1.4 percent to C$56.55, while Bank of Nova Scotia gained 1.3 percent to end the session at C$48.80.

The banks' rally helped power the financials index, which accounts for about a third of the TSX, to its highest level in over two weeks.

"There is still very much a positive sentiment that things are improving," said Gareth Watson, Canadian equity adviser with ScotiaMcLeod.

"And so people are positioning themselves for 2010 saying, 'Look, it may not be as fast as people expect, but overall there are expectations for gains next year'."

The S&P/TSX composite index closed up 73.26 points, or 0.63 percent, at 11,627.98.

Another driver behind the gains came from energy stocks, which benefited from a rise in oil prices.

Suncor Energy, the biggest contributor to the latest gain, rose two percent to C$36.50, while Talisman Energy ended up 1.3 percent at C$19.66.

Activity over the next two days is expected to slow to a standstill with many investors get set to take off for the Christmas and New Year holidays.

The Toronto Stock Exchange will close at 1 p.m. tomorrow afternoon.