* TSX ends up 1.1% at 20,452.87

* Posts its highest closing level since Sept. 18

* Industrials and bond proxies among biggest gainers

* National Bank of Canada rallies after Q4 results

Dec 1 (Reuters) - Canada's main stock index rose on Friday to a two-and-a-half-month high as comments by Federal Reserve Chairman Jerome Powell raised investor hopes that major central banks will shift to cutting interest rates in 2024.

The Toronto Stock Exchange's S&P/TSX composite index ended up 216.58 points, or 1.1%, at 20,452.87, its highest closing level since Sept. 18.

"Santa (Claus) is coming to town and he is rewarding all stock holders," said Barry Schwartz, portfolio manager at Baskin Financial Services. "Today, Federal Reserve Chairman Powell spoke and I think the markets are thinking that global synchronized rate cuts are coming in 2024."

U.S. stocks also advanced as Powell reaffirmed the U.S. central bank's intent to be cautious on raising interest rates further to tame inflation but also offering fresh optimism on its progress so far.

The industrials sector rallied 2.1%, while bond proxies, such as real estate and utilities, which tend to produce predictable cash flows and could particularly benefit from a peak in interest rates, were among the other standout performers.

Real estate rose 2.2% and utilities ended 2% higher.

The TSX notched in November its biggest monthly advance in three years.

Financials added 0.7% on Friday as National Bank of Canada reported higher fourth-quarter profit. Its shares rose 4.8% while shares of Bank of Montreal also climbed, rising 2%, as the bank forecast more cost savings from its $16 billion acquisition of U.S. lender Bank of the West.

The banks "are tightening up on lending and could face another challenging year ahead, but we're not seeing growth falling off a cliff," said Angelo Kourkafas, a senior investment strategist at Edward Jones.

Domestic data showed the economy adding 24,900 jobs in November, more than analysts expected. (Reporting by Fergal Smith in Toronto and Shashwat Chauhan in Bengaluru; Editing by Tasim Zahid and Sandra Maler)