* TSX ends down 2.3% at 34,413.45

* Posts biggest decline since February 12

* Materials group tumbles 8.3% as gold falls

* Canada's economy adds 87,800 jobs in May

(Updates at market close)

By Fergal Smith

June 5 (Reuters) - Canada's main stock index posted on

Friday its biggest decline in nearly four months as commodity

prices fell and investors raised bets on Federal Reserve

interest rate hikes, with technology and metal mining shares

leading the move lower.

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

ended down 803.61 points, or 2.3%, at 34,413.45,

pulling back from a record closing high on Thursday and marking

its biggest decline since February 12. For the week, the index

was down 1%.

* Wall Street's major indices also posted steep losses as

red-hot technology stocks suffered their largest daily decline

this year after a stronger-than-expected May jobs report fueled

fears of a hawkish policy pivot from the U.S. Federal Reserve.

* Canada's employment report also beat expectations. The

economy added 87,800 jobs last month, wiping out much of the

declines posted since the start of the year.

* "Canada's job market came roaring back to life in May,"

Derek Holt, head of capital markets economics at Scotiabank,

said in a note.

* "This is the jobs report that the Bank of Canada has been

dreaming about as they will heave a big sigh of relief to see

further signs of a Q2 rebound in the works," Holt said.

* The Bank of Canada will hold its key overnight rate at

2.25% on June 10 and for the rest of the year, according to a

majority of economists polled by Reuters, despite rising

inflation risks stemming from higher energy prices.

* The materials group, which includes metal

mining shares, tumbled 8.3% as gold and copper

prices fell.

* Gold lost 3.2%, copper was down 4%, while the price of oil

settled 2.7% lower at $90.54 a barrel on mounting hopes

for de-escalation in the Middle East conflict.

* Energy was down 4.1%, with shares of TerraVest

Industries Inc ( TRRVF ) down 31.6%. Technology ended

4.4% lower.

* Helping to cap the TSX's losses, the consumer staples

sector rose 2.8%.