S&P/TSX COMPOSITE INDEX 
The rally came after the index fell on Monday to a nearly four-week low of 13,535.54.
"There certainly has been some change in sentiment and it's a good thing that investors are getting back to buying on the dips," said Elvis Picardo, strategist and vice president of research at Global Securities.
The most influential movers on the index included Suncor Energy Inc (>> Suncor Energy Inc.), which rose 3.9 percent to C$34.52, and Canadian Natural Resources Ltd (>> Canadian Natural Resources Limited), which advanced 3.1 percent to C$36.95.
The overall energy group advanced 2.4 percent as oil rallied.
U.S. crude
Oil sands companies around the Canadian energy center of Fort McMurray began to resume production after an out-of-control wildfire forced a shutdown a week ago, and energy executives met with province leaders who reported the town was less damaged than first feared.
The better news for oil sands companies has pulled investors back into the market, said Picardo.
French utility EDF (>> EDF) announced a deal to build three offshore wind parks in France with Canada's Enbridge Inc (>> Enbridge Inc). Enbridge's shares rose 3.5 percent to C$51.66.
The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed up 211.35 points, or 1.56 percent, at 13,775.19. It touched its highest since May 3 of 13,797.96.
"I think the reason for these big swings is because investors are still very unsure about the state of the global economy," said Picardo.
The financials group advanced 1.1 percent, including a 1.3 percent gain for Royal Bank of Canada (>> Royal Bank of Canada) to C$76.61, while Toronto-Dominion Bank (>> Toronto-Dominion Bank) was up 1.1 percent at C$55.93.
Industrials rose 1.6 percent, led by railway stocks.
Nine of the index's 10 main groups ended higher.
(Reporting by Fergal Smith; Editing by Chizu Nomiyama and Sandra Maler)
By Fergal Smith
