CANADA STOCKS-TSX edges up at start of March as resource shares rally

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TSX ends up 38.59 points, or 0.2%, at 20,259.78

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National Bank of Canada climbs after earnings beat

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Royal Bank of Canada falls on higher provisions

(Adds details throughout; updates prices to close)

By Johann M Cherian and Fergal Smith

March 1 (Reuters) - Canada's main stock index ended higher on Wednesday, led by materials and energy stocks after manufacturing data from China eased some economic slowdown fears, although a decline in the shares of Royal Bank of Canada on higher loan-loss provisions capped the market's gains.

The Toronto Stock Exchange's S&P/TSX composite index ended up 38.59 points, or 0.2%, at 20,259.78, after a rough February for global equity markets in which the TSX lost 2.6%.

"The market is reacting positively to strong purchasing manufacturing index readings out of China," said Brandon Michael, senior analyst at ABC Funds. "Despite fears of an incoming recession, we're not seeing any of that in the data, which bodes well for recovery in risk assets."

China's factory sector grew in February at the fastest pace in more than a decade in a boost for global economy recovery hopes. That's good news for the TSX which has a 30% weighting in resource shares.

Domestic data was also upbeat, showing that manufacturing activity expanded at its fastest pace in seven months.

The Toronto market's energy and materials sectors both gained 2.1%, as oil settled 0.8% higher at $77.69 a barrel, while gold and copper prices also climbed.

National Bank of Canada shares added 1.6% after the bank reported first-quarter profits ahead of expectations. In contrast, the shares of Royal Bank of Canada the country's biggest lender, were down 3.6%.

Shares of Sleep Country were also a drag, falling 7.7% to its lowest closing level since Jan. 6. (Reporting by Johann M Cherian in Bengaluru; Editing by Shilpi Majumdar)