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* TSX closes up 92.35 points, or 0.60 percent, at 15,598.57
* Index posts highest close in three weeks
* Seven of TSX's 10 main groups gain
By Fergal Smith
TORONTO, March 28 (Reuters) - Canada's main stock index notched its highest close in three weeks on Tuesday as an oil price rally helped energy stocks and a jump in U.S. consumer confidence boosted global markets.
U.S. consumer confidence surged to a more than 16-year high in March amid growing labor market optimism.
"It's indicative that the economy is on a firm footing and so we have most equity markets move higher, including a risk-on market like Canada," said Ben Jang, portfolio manager, Nicola Wealth Management.
Canada's market includes many commodity-related stocks, which benefit from a pick-up in global growth.
"Longer term you see the improving global economy, so a stronger equity market is justifiable," Jang said.
A severe disruption to Libyan oil supplies and comments from officials suggesting the Organization of the Petroleum Exporting Countries could extend its production cuts deal to the end of the year boosted oil prices.
U.S. crude prices settled 64 cents higher at $48.37 a barrel, and the energy group climbed more than 2 percent, led by a 2.4 percent gain for Suncor Energy Inc to C$41.42.
Royal Bank of Canada rose more than 1 percent to C$97.82, and the overall financials group gained 0.9 percent as bond yields climbed.
The yield on the Canadian government 10-year benchmark bond rose 2.1 basis points to 1.621 percent, breaking a downward trend since mid-March. A rise in bond yields would reduce the value of insurance companies' liabilities and increase net interest margins of banks.
The Toronto Stock Exchange's S&P/TSX composite index closed up 92.35 points, or 0.60 percent, at 15,598.57, its highest close since March 7.
The index has rebounded more than 2 percent from a three-month low last week of 15,241.55, helped by Canada's government holding off from increased taxes on investors in its budget.
Seven of the index's 10 main groups rose. Industrials advanced 1.2 percent as railroad stocks climbed.
Goldcorp's shares slumped 6.9 percent to C$19.98, and Barrick Gold's stock declined 2.5 percent to C$25.55 as spot gold prices edged lower from a one-month intraday high on Monday.
The two companies on Tuesday announced they would team up to work on developing gold mines in northern Chile.
The overall materials group, which includes precious and base metals miners and fertilizer companies, lost 1.7 percent.
Canada's economy would tip into recession if interest rates were raised today, Bank of Canada Governor Stephen Poloz said. (Reporting by Fergal Smith; Editing by W Simon and James Dalgleish)