* TSX up 137.1 points, or 1 percent, to 13,895.48
* Nine of the TSX's 10 main groups rise
By Alastair Sharp
TORONTO, Oct 20 (Reuters) - Investors in Canadian stocks on Tuesday cheered a resounding Liberal election victory that could loosen government purse strings to kickstart growth, as construction firms and railways rose with heavyweight resource and financial stocks.
The Liberals' strong showing removed the uncertainty that could have resulted from a minority government. And while the new government plans to run deficits, it has also said it would keep corporate tax rates steady.
"People are breathing a sigh of relief and they are looking for those areas that should show a positive impact from what the Liberals were talking about," said Irwin Michael, portfolio manager at ABC Funds.
During the campaign, Liberal leader Justin Trudeau pledged to run a C$10 billion ($7.7 billion) annual budget deficit for three years to invest in infrastructure and help stimulate Canada's anemic economic growth.
"New subways and new infrastructure will create employment and will offset some weakness in the commodity portions of the economy," Portfolio Management Corp's Darren Sissons wrote in a note.
Among the stocks to jump were construction companies SNC-Lavalin Group, which added 2.7 percent to C$43.50, and Aecon Group Inc, which gained 3.8 percent to C$15.26.
The Toronto Stock Exchange's S&P/TSX composite index had gained 137.1 points, or 1 percent, to 13,895.48 by
10:54 a.m. ET (1454 GMT).
Nine of the index's 10 main groups were higher, with financials up 2.2 percent and energy stocks jumping 3.6 percent even as the price of oil held steady.
Advancers outnumbered decliners by 207 to 32, for a 6.47-to-1 ratio on the upside.
The two main railways also rose, with Canadian Pacific Railway up 2.5 percent to C$194.93 after reporting profit that beat expectations on higher freight rates and lower operating costs.
Its rival Canadian National Railway added 1.3 percent to C$78.07.
Healthcare stocks were the only group to pull back, weighed down by a 5.6 percent drop in Valeant Pharmaceuticals International Inc, to C$200.71.
Progressive Waste Solutions was the second biggest weight, plunging 17.5 percent to C$29.07 after the waste management company cut its earnings forecast.
Outside the main index, Canada's nascent medical marijuana sector was higher. Trudeau has talked about legalizing and shares of some of the better-recognized companies surged after the Liberal sweep.
TSX Venture-listed Canopy Growth Corp, the first company to go public in the sector in Canada last year, rose some 9 percent to C$2.37.
$1 = 1.2941 Canadian dollars Editing by Chris Reese