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TSX falls 0.95% to 21,899.99

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For the week, the index was down 1.64%

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Financials lose 0.91% after mixed U.S. bank results

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Materials sector falls 1.03% as gold rally stalls

(Updates at market close)

By Purvi Agarwal and Fergal Smith

April 12 (Reuters) - Canada's main stock index fell on

Friday by the most in nearly two months, including declines for

financial and resource shares, as investors took stock of recent

gains for the market and the risk of a wider conflict in the

Middle East.

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

ended down 210.12 points, or 0.95%, at 21,899.99, its

biggest decline since Feb. 13. For the week, it lost 1.64%,

after eight straight weeks of gains.

"Geopolitics has some negative connotation to the price

action but it's also a measure of deep overbought conditions

that we have had in broad indices," said Sid Mokhtari, chief

market technician for CIBC Capital Markets.

"We are not seeing any alteration from a longer-term bull

perspective. Trends are still in good shape."

Israel nervously awaited an attack by Iran or its proxies as

warnings grew of retaliation for the killing last week of a

senior officer in Iran's embassy in Damascus.

The Toronto market has climbed 4.49% since the start of the

year. On Tuesday, it touched a new record closing high at

22,361.78.

The decline since then came as U.S. data showed inflation

heating up in March.

"This week's data showed that progress on inflation might be

stalling," said Angelo Kourkafas, senior investment strategist

at Edward Jones Investments. "Interest rates might need to stay

high for longer."

All ten major sectors lost ground on Friday, including a

decline of 0.91% for heavily-weighted financials after

major U.S. banks reported mixed results.

The materials group, which includes metal miners

and fertilizer companies, was down 1.03% as gold

retreated from an earlier record high.

Oil settled 0.8% higher at $85.66 a barrel, supported

by Middle East tensions, but the gain was not enough to boost

energy. The sector lost 1.03%, while technology

was down 1.63%.