TORONTO, Aug 27 - Toronto"s main stock index ended modestly higher on Thursday as rosier-than-expected quarterly results from top Canadian banks lifted financial stocks, offsetting weak commodity-related issues.

Several of Canada"s biggest banks reported stronger-than-expected profits as soaring trading revenues outweighed credit woes, and their shares finished the day sharply higher. [ID:nN27309157]

The financials sector, home to Canada"s banks and insurers, accounts for about a third of the TSX index. It rose 2.3 percent with Royal Bank of Canada (RY.TO) topping the list of influential gainers, up 6.5 percent at C$56.55.

Toronto-Dominion Bank (TD.TO) rose 3.2 percent at C$68.39 and National Bank of Canada (NA.TO) gained 4.1 percent to C$60.89.

"The banks have just exploded. It"s incredible," said Bill Harris, a portfolio manager at Avenue Investment Management.

The S&P/TSX composite index .GSPTSE rose 21.79 points, or 0.2 percent, at 10,933.96, with three of its 10 main sectors higher.

The gains were kept in check by weakness in the big energy sector, which dropped 1.2 percent, even as oil rose to settle at $72.49 a barrel, helped by a weaker greenback. [ID:nSP475982]

"We"ve had a good run. The energy stocks are taking a break," Harris said.

Suncor Energy (SU.TO) sank 1.6 percent to C$34.26 and Canadian Natural Resources (CNQ.TO) fell 1.4 percent to C$63.94.

"I think you"re seeing a pause where the people who have been buying the market are sitting back and seeing what sort of consolidation we might see, if other players will come in, if other sectors will begin to rotate," said Bruce Latimer, trader at Dundee Securities.

Analysts have said the market could lose clear direction as it heads into September, considered one of the more volatile months of the year, with investors taking a breather after bidding up the market by about 45 percent since early March.

The blue chip S&P/TSX 60 index .TSE60 closed 1.44 points higher, or 0.22 percent, at 657.88.

($1=$1.09 Canadian)