TORONTO (Reuters) - The Toronto Stock Exchange's main index ended higher, helped by an afternoon rally as strength in financials offset declines in energy issues.

The financial sector, which has been plagued by news of writedowns both in Canada and the United States, thanks to the subprime mortgage crisis, rose 2.6 percent in a strong showing from the major banks.

Bank of Montreal rose C$2.55, or 4.6 percent, to C$57.95, after previously announced charges took a bite out of its quarterly earnings but profits excluding charges rose.

Elsewhere in the sector, Toronto-Dominion Bank was up C$2.88, or 4.5 percent, at C$67.36.

The S&P/TSX composite index closed up 48.07 points, or 0.36 percent, at 13,369.12 with seven of the TSX's 10 main groups higher.

But it was a volatile session, with the index falling as low as 13,190.13. The TSX has lost 8.6 percent since November began and is on track to hit its biggest monthly decline since February 2001, when the it fell more than 13 percent.

"At this point in time, I'd be very cautious because we're sort of teetering on the edge here," said Lex Kerkovius.

"Unless this market rallies soon here, this is going to get a lot worse," he said, adding that the TSX could move beyond a correction phase and into a full blown bear market.

Canadian Natural Resources led the retreating energy sector lower after it said its natural gas output will be lower next year as it cuts drilling by a third.

Canadian Natural finished down C$5.44, or 7.7 percent, at C$65.61.

The news helped trimmed 2.9 percent off the heavyweight energy group, which was also hurt by a slide in oil prices on expectations that OPEC will increase supply. Oil fell $3.28 to $94.42 a barrel.

Elsewhere in the sector, Suncor Energy was down C$3.04, or 3.1 percent, at C$96.40.

On the upside, the tech sector advanced 1.5 percent with help from Research In Motion as two top Russian mobile firms said they would start selling BlackBerry phones in Russia.

Waterloo, Ontario-based RIM finished up C$4.31, or 3.9 percent, at C$115.00.