(Updates throughout with closing prices and comments)

* TSX falls 1.4%, down over 7% since Iran conflict began

* Materials sector plunges 5%; gold miners drop 6% as

bullion slides 3.2%

* Small-cap gold stocks slump 8% to 12% amid broad

selloff

By Purvi Agarwal and Promit Mukherjee

March 19 (Reuters) - Canada's main stock index slipped

on Thursday as an escalation in the Middle East conflict

following attacks on energy infrastructure in the region added

to inflation concerns, causing sharp declines in gold, silver

and other mining shares.

A moderate easing of U.S. crude oil prices later in the day

helped the market pare some losses.

The Toronto Stock Exchange's S&P/TSX composite index

ended down 1.42% at 31,854.98, its lowest level since

February, bringing the index's total decline to over 7% since

the start of the Iran war.

The materials sector, which includes gold and

mining stocks, plunged by more than 5% to its lowest level this

year.

Gold miners led the decline with a drop of 6%,

largely due to a rout in small gold mining companies, which fell

between 8% and 12%. Spot gold prices, which scaled an

all-time high of almost $5,400 per ounce at the end of January,

fell 3.2% to $4,657 per ounce.

"Today ... it's all gold. The gold is crushed and tumbled,"

said Barry Schwartz, chief investment officer at Baskin Wealth

Management.

Brent crude futures pared gains after jumping above

$119 a barrel after Iran attacked energy facilities across the

Middle East following Israel's strike on its South Pars gas

field. Brent settled at $108.65 per barrel, up 1.2%. U.S. crude

settled down slightly.

Energy stocks posted a big jump with the index up

almost 3.37% and companies seeing a healthy surge in share

prices. Canada is a net exporter of oil and higher prices

benefit the companies and government.

"Those things (oil and mining) are notoriously very, very

speculative and could move quickly," Schwartz said, adding if

the Iran conflict does not last long, that could be a good

buying opportunity for investors outside of the commodity

sector.

Rising oil prices and no sign of ending the Iran war have

eroded risk appetite, with the malaise spreading beyond the

mining sector.

The index-heavyweight financial sector,

industrials and real estate all lost more

than a percentage point on Thursday, TSX data showed.

Royal Bank of Canada ( RY ) dropped by 1.21% while TD Bank

shed 0.67%.