* TSX ends up 0.5% at 22,320.87
* For the week, the index falls 0.6%
* Financials add 0.8%, TD Bank gains 2.2%
* Energy gains 0.7%, oil settles 1.1% higher
May 24 (Reuters) - Canada's main stock index rose on Friday as heavily-weighted financials led broad-based gains and after domestic inflation data this week raised expectations the Bank of Canada would soon cut interest rates.
The Toronto Stock Exchange's S&P/TSX composite index ended up 120.08 points, or 0.5%, at 22,320.87, rebounding after it posted on Thursday its lowest closing level in nearly three weeks. For the week, the index was down 0.6%.
Friday was the last trading day before Canada moves to shorten the trade settlement period to one day from two days, keeping it aligned with U.S. markets.
"It's a confusing market at the moment but the bottom line is the most important number for the week was the Canadian inflation number," said Barry Schwartz, a portfolio manager at Baskin Financial Services.
"It's time to cut (interest) rates and that should be good for a lot of TSX laggards."
Data on Tuesday showed Canada's annual inflation rate fell to a three-year low of 2.7% in April, raising expectations the BoC would begin cutting rates in June.
Interest rate sensitive stocks such as financials, utilities and real estate account for 35% of the TSX, while energy, which includes high-dividend paying pipeline companies, contributes an additional 20%.
Financials rose 0.8% as Toronto-Dominion Bank shares recouped their previous day's decline, rising 2.2%. The bank reported better-than-expected quarterly earnings on Thursday even as its U.S segment struggled amid probes related to its anti-money laundering program.
"Clearly regulatory issues and the fact that it won't be allowed to grow in the U.S. for a while is not directionally positive but the results themselves were ok," Schwartz said.
Energy added 0.7% as the price of oil settled 1.1% higher at $77.72 a barrel. The materials group , which includes metal miners and fertilizer companies, was also up 0.7%. (Reporting by Fergal Smith in Toronto and Khushi Singh in Bengaluru; Editing by Ravi Prakash Kumar and Chris Reese)