TORONTO (Reuters) - Toronto's main stock index was up more than 1 percent at midday on Friday as commodity prices rose on optimism that Italy would pass an austerity package that would calm fears about Europe's debt crisis.

Global stocks were buoyed by the Italian senate's vote in favor of a package of austerity measures that were demanded by the European Union in the face of Italy's severe debt problems. The package must still be passed by Italy's lower house, leaving a degree of investor nervousness.

Commodity prices look like they have some bounce to them, said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.

If we get by the euro zone issues again, the economic indicators are inconsistent with an outright global economic recession, so that's not a bad backdrop for what we produce in abundance here in Canada, Taylor said.

Also fueling the index's rise was upbeat U.S. consumer data as a Thomson Reuters/University of Michigan index on consumer sentiment rose to its highest level in five months.

After two straight down sessions, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 170.06 points, or 1.4 percent, at 12,278.93.

The index's heavily weighted materials sector, home to base-metal and gold miners, surged more than 2 percent, nearly erasing Thursday's losses.

Barrick Gold Corp (ABX.TO: Quote) led the sector, rising 2.6 percent to C$53.36, as bullion prices headed for their third straight week of increases.

Base metals miners performed strongly, boosted by rising copper prices, jumping more than 2.5 percent. The sector was led by First Quantum Minerals (FM.TO: Quote), which was up more than 5 percent at C$19.25 after falling more than 20 percent the last two sessions.

Teck Resources (TCKb.TO: Quote) was also among the sector's top gainers, rising 2 percent to C$38.54.

Rare earths producer Neo Material Technologies (NEM.TO: Quote) gained nearly 6 percent to C$8.47, a day after it reported a record third-quarter profit, beating market expectations.

All of the index's 10 main sectors were higher, with energy and financials both up more than 1 percent.

Suncor Energy Inc (SU.TO: Quote) climbed 2.3 percent to C$32.34 to lead energy stocks, which rose 1.5 percent as oil prices rode the commodities wave.

Financial stocks were led higher by Royal Bank of Canada (RY.TO:Quote), whose shares rose 1.5 percent to C$45.67.

Power Financial Corp's (PWF.TO: Quote) (POW.TO: Quote) shares were up 2.55 percent at C$26.15 after it reported a higher profit due to stronger results at its insurance and mutual fund subsidiaries.

($1=$1.01 Canadian)

(Editing by Jeffrey Hodgson and Peter Galloway)