* TSX up 0.6%

* Crypto stocks rise as Bitcoin climbs

* Materials up on upbeat Chinese data

Dec 27 (Reuters) - Canada's main stock index rose 0.65% on Wednesday, extending gains to a third day, helped by energy and healthcare stocks, while investors grew optimistic that major central banks could begin cutting interest rates in the upcoming year.

At the 4 p.m. EST (2100 GMT) provisional close, the Toronto Stock Exchange's S&P/TSX composite index rose 134.72 points, or 0.65%, at 21,015.91, its highest close since May 4, 2022.

Fund managers were cautious after the recent rally, which has taken this year's index gains to 8.4%. They warned the price action could be exacerbated by thin trading volume during the holiday period, while Middle East tensions could be back in focus in the New Year.

"The action in December always tends to be misleading because the volume of trading are down...," said Elvis Picardo, senior portfolio manager at Luft Financials, iA Private Wealth.

"It is quite possible that in New Year investors will once again try to get a grip on the deteriorating geopolitical situation and central bank's moves."

Top gainer healthcare sector rose 2.9%, led by gains in Bausch Health Companies which climbed 3.7%.

Shares of crypto firms Bitfarms and Hut 8 Mining soared 17.2% and 21.7%, respectively, as Bitcoin climbed over 1.5%.

The broader information technology index gained 1.0%.

The materials sector, which includes metals miners and fertilizer companies, ended at 0.66% high as prices of most base metals rose after data showed manufacturing activity in top consumer China improved last month, while a weak U.S. dollar also lent support to the market. (Reporting by Khushi Singh in Bengaluru, Divya Rajagopal in Toronto; Editing by Ravi Prakash Kumar and Josie Kao)