* TSX rises 127.30 points, or 1.02 percent, to 12,560.83 * Materials up 1.9 percent, financials rise 0.6 percent * Eight of 10 main sectors advance By John Tilak TORONTO, Jan 2 Canada's main stock index gained 1 percent to hit a 9-month high on Wednesday, led by material and financial stocks, as investors lauded a deal by lawmakers in the United States, Canada's biggest trading partner, to resolve a high-stakes budget crisis. The U.S. averted economic calamity when lawmakers approved a deal late on Tuesday to avoid a "fiscal cliff" of massive tax hikes and spending cuts that had threatened to tip the world's largest economy into recession. "It's a matter of hope and confidence that all this stuff that's been overhanging the market over the last number of weeks can be put to rest now, and we can see if we can find something else to worry about," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "There's a little more confidence and a little more comfort in the minds of investors," he said. The Toronto Stock Exchange's S&P/TSX composite index was up 127.30 points, or 1.02 percent, at 12,560.83, after earlier reaching 12,588.75, its highest since March 27, 2012. Eight of the 10 main sectors on the index rose. Mining and financial shares, which suffered the most in recent months due to uncertainty over how the U.S. would resolve its fiscal crisis, benefited the most from Tuesday's deal. The materials sector was up 1.9 percent, buoyed by higher commodity prices and a 1-percent rise in the price of gold. Goldcorp Inc rose 1.6 percent to C$37.14 and Barrick Gold Corp gained 0.8 percent to C$35.11. Teck Resources Ltd gained 3 percent to C$87.24. The financial group, the index's biggest, advanced 0.6 percent. Royal Bank of Canada rose 0.7 percent to C$60.28, and Manulife Financial Corp gained 2.2 percent to C$13.80. Suncor Energy Inc rose 1.4 percent to C$33.18, tracking higher oil prices. That helped the energy sector gain nearly 1 percent. On the downside, shares of Petrobank Energy and Resources tumbled 92 percent to C$1.03 as the company completed a major reoganization under which it distributed its 57 percent stake in PetroBakken Energy Ltd, the unconventional light oil producer, to its shareholders. The new Petrobank will own and operate its predecessor's heavy oil business as well as the company's oil recovery technology.
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