TORONTO (Reuters) - Toronto's main stock index closed higher yesterday as investor confidence got a boost from a landmark bill to overhaul the US healthcare system, and strengthening commodity prices turned around resource issues.

President Barack Obama's landmark healthcare overhaul, passed by the US House of Representatives late on Sunday, brought relief to investors and sent shares in the US healthcare sector higher, spilling over into Canadian markets.

"The turnaround in healthcare and the overall strengthening US market was a catalyst," said Francis Campeau, a broker at MF Global Canada, in Montreal.

"The fear index was quite high this morning," he added, referring to the TSX's negative start on risk aversion over Greece's ongoing debt crisis and the initial response to the healthcare bill.

While analysts have raised concerns the bill could hit corporate profits, they said much of the negative impact was priced in after a year of volatile trading on concerns over the burdens from reform. They also noted the bill removed some of the uncertainty that had worried investors.

Shares of Biovail Corp., Canada's biggest publicly traded drugmaker, added almost one percent to C$16.27 while life sciences company MDS Inc rose 1.7 percent to C$8.54.

"Biovail is going to benefit from it as more people are going to pay for drugs ... 30 million more people will have access to drugs," said Claude Camire, an analyst at Paradigm Capital.

"Biovail is selling the right kind of drugs and they are not expensive...They are right in the sweet spot for the industry."

A rebound by the euro versus the safe-haven greenback later in the day also helped lift commodity prices, boosting the index's heavily weighted energy and resource issues.

Most commodities are priced in US dollars.

The Toronto Stock Exchange's S&P/TSX composite index closed up 19.19 points, or 0.16 percent, at 11,967.17.

Eight of the index's 10 sectors were higher.

Among the gainers, the materials sector, up 0.2 percent, reversed an earlier loss as copper prices firmed, although gold fell to its lowest in more than three weeks.

Miner Teck Resources gained 1.2 percent to C$40.54 while Ivanhoe Mines added 0.6 percent to C$16.33.

Heavily weighted energy issues remained pressured by recent oil price declines, although crude prices came off their recent lows yesterday, rising for the first time in three days above $81 a barrel.

Natural gas major EnCana Corp. was off 0.9 percent to C$31.10, while Suncor Energy Inc., Canada's largest oil company fell 0.3 percent to C$31.20.