TORONTO (Reuters) - The Toronto Stock Exchange's main index rallied yesterday, propelled by a rebound in resources as oil prices bounced back from an earlier retreat.

After a shaky start, the index rose more than one percent, heartened by a rise in heavyweight energy shares, including Canadian Oil Sands Trust, which was up C$2.09, or 4.3 percent, at C$51.21.

Canadian Natural Resources put on 95 Canadian cents, or one percent, to C$98.89, while the group as a whole added 1.4 percent.

The resource-laden materials sector also gave support, up 1.8 percent, with fertiliser companies Potash Corp of Saskatchewan and Agrium climbing C$6.51, or 3.4 percent, to C$195.50, and C$3.98, or 4.9 percent, to C$85.30 respectively.

The S&P/TSX composite index closed up 166.49 points, or 1.15 percent, at 14,688.62 with seven of its 10 main sectors higher.

Bank reporting season continued with Toronto-Dominion Bank posting a decline in second-quarter profit, hit by restructuring charges and a profit drop at its wholesale banking unit due to the credit crunch. Shares of TD edged up 26 Canadian cents, or 0.4 percent, to C$68.70.

The financial sector added 0.7 percent, with help from Bank of Nova Scotia, which regained C$1.14, or 2.4 percent, to C$48.79 the day after it reported lower profit and higher provisions for credit losses.

Laurentian Bank gained 57 Canadian cents, or 1.4 percent, to C$41.82 after it said its profit rose due to growth in its loan and deposit portfolios.

Shares of Sears Canada jumped C$1.70, or 7.2 percent, to C$25.20 after Canada's second-biggest department store chain said a property sale gain offset declining same-store sales and lifted its first-quarter profit.