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CANADA STOCKS-TSX touches two-year high as Fed hopes lift market

* TSX rises 51.18 points, or 0.38 percent, to 13,482.56

* Seven of the 10 main index sectors advance

* Index up 0.8 percent on the week

* Canadian Natural is the index's most influential gainer

* Saputo climbs after raising bid for Australian company

By John Tilak

TORONTO, Nov 15 (Reuters) - Canada's main stock index rose

to its highest in more than two years on Friday after Federal

Reserve Vice Chair Janet Yellen, who is widely expected to take

over as head of the U.S. central bank, expressed strong support

for the Fed's stimulus program.

The Toronto stock market's benchmark index advanced for a

third straight session and recorded a second consecutive weekly


Economic reforms announced by China, which included steps to

free up markets, also provided support.

Yellen defended the Fed's plans to stimulate growth and said

on Thursday she would implement the central bank's ultra-easy

monetary policy until officials are confident the economic

recovery is robust and job creation sustainable.

"The spotlight is clearly on Janet Yellen," said Adrian

Mastracci, portfolio manager at KCM Wealth Management, who

expects the Canadian market to benefit in the near term from the

continuation of the Fed's accommodative monetary policy.

"As long as the Fed is shelling out money, we're going

higher," he added. "But someday the buying has to stop."

The Toronto Stock Exchange's S&P/TSX composite index

closed up 51.18 points, or 0.38 percent, at 13,482.56,

after reaching 13,490.19, its highest level since July 2011.

The strong advances in the Canadian market over the last one

month are unsustainable, said John Ing, president of Maison

Placements Canada. But lagging natural resource stocks offer

value, he added. "My expectation is that commodities will pick


Seven of the 10 main sectors on the index were higher on


Financials, the index's most heavily weighted sector, rose

0.4 percent. Bank of Nova Scotia advanced 0.3 percent

to C$65.64, and Toronto-Dominion Bank rose 0.6 percent

to C$97.33.

Energy shares jumped 1 percent. Canadian Natural Resources

Ltd rose 3 percent to C$34.10 and was the index's most

influential gainer. Suncor Energy Inc advanced 0.4

percent to C$37.36.

Canadian dairy company Saputo Inc raised its

takeover offer for Australia's Warrnambool Cheese and Butter

Factory Co Holdings Ltd by 12.5 percent, and

Warrnambool's board unanimously recommended it.

Saputo shares rose 0.8 percent to C$49.08.