TORONTO (Reuters) - Toronto's main stock index finished up nearly one percent yesterday with bank and insurance shares buoyed by optimism that quarterly US bank results this week will show the sector has stabilised after being shaken hard in the global financial crisis.

Bets that the US financial group will post reassuring results pushed up the main Toronto index's financial sector two percent. Royal Bank of Canada rose 2.58 percent to C$40.60.

Among other top gainers were Toronto Dominion Bank, up 2.46 percent at C$47.90, and Manulife Financial, up 2.59 percent at C$18.98.

"We're kind of back in the mentality that the first quarter earnings, at least on the financial side, are going to be fairly good. Step one is to try to get some solid earnings in that sector," said Andrew Pyle, a wealth advisor at ScotiaMcLeod in Peterborough, Ontario.

He said that if US banks report positive results, then that will suggest that credit conditions overall have probably started to improve, as well as the availability and access to capital.

The S&P/TSX composite index closed up 98.5 points, or 1.07 percent, at 9,285.62. Earlier it hit 9,310.89, its highest level since January 7.

Seven of the index's 10 main groups advanced.

The energy sector was also on the move higher as the price of oil pared early losses. Crude oil skidded after the International Energy Agency cut its forecast for oil demand deeply.

But the oil group fought back after initial weakness, finishing the session up 0.53 percent.