May 26 (Reuters) - Canada's main stock market rallied on Friday, helped by gains for financial and technology shares as well as signs of progress in U.S. debt ceiling talks, but the index still posted its fifth straight weekly decline.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 146.23 points, or 0.7%, at 19,920.31.

For the week, the index was down 2.1% as Canada's major banks reported quarterly earnings. The weekly losing streak was the longest for the TSX in a year.

"The big drag on the market this week were banks," said Greg Taylor, chief investment officer at Purpose Investments. "We're definitely seeing increased expenses and some concerns of a recession creeping into the sector."

Wall Street also rose on Friday as progress in negotiations on raising the U.S. debt ceiling offset economic data that could support an additional interest rate hike by the Federal Reserve.

"Once a debt deal is done, markets will have to deal with the harsh reality that the Fed is going to kill this economy," Edward Moya, senior market analyst at OANDA, said in a note.

"The end of tightening might not occur until the end of summer and that means we will probably get bigger rate cuts next year."

Financials, the most heavily-weighted sector on the TSX, pared some of its weekly decline, rising 1.1%. The gain for financials came despite a 5.9% drop in the shares of Canadian Western Bank (CWB.TO) after the bank reported quarterly earnings.

Technology advanced nearly 2%, while the energy sector (.SPTTEN) was up 0.5% as oil settled 1.2% higher at $72.67 a barrel.

Shares of cannabis producer Tilray Brands Inc tanked 20.4% after the company announced a convertible notes offering.

Reporting by Fergal Smith in Toronto and Johann M Cherian in Bengaluru; Editing by Rashmi Aich and Marguerita Choy

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