* TSX falls 0.95% to 21,899.99

* For the week, the index was down 1.64%

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

* Materials sector falls 1.03% as gold rally stalls

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%. (Reporting by Fergal Smith in Toronto and Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar and Diane Craft)