TORONTO (Reuters) - The Toronto Stock Exchange's main index closed higher on Tuesday, surging late in the day after sharp, early losses, as gains in the broader market offset a drop in energy issues due to falling oil prices.

In a see-saw session, the index fell by more than 1 percent in the morning, undermined by declines in commodity prices, following two days of steep losses.

The heavyweight energy sector came off its lows but was still down 1.3 percent as oil prices fell on a rallying U.S. dollar and easing concern over an Atlantic hurricane.

The index's late bounce tracked a recovery in stocks south of the border with investors scooping up recently downtrodden shares.

The S&P/TSX composite index closed up 96.97 points, or 0.71 percent, at 13,809.77 with all but two of its 10 main sectors in positive territory.

Shares of WestJet Airlines jumped C$1.41, or 11.1 percent, to C$14.10 after U.S. carrier Southwest Airlines said it will start a codeshare partnership with the Canadian company.

Under the agreement, the two airlines will sell seats on each other's flights, giving them access to new customers with lower marketing costs. WestJet's gain help pull the industrials sector up 3.9 percent.

Gains in financials also helped push the benchmark higher. National Bank of Canada rose C$1.69, or 3.5 percent, to C$50.54, and Bank of Montreal was up C$1.42, or 3.3 percent, at C$43.95. The group overall rose 2.1 percent.

Among the laggards in the oil patch, Canadian Natural Resources was down C$3.46, or 3.8 percent, at C$88.88, and Canadian Oil Sands Trust fell C$1.73, or 3.5 percent, to C$48.05.

(Reporting by Leah Schnurr; Editing by Peter Galloway)

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