* TSX ends down 0.9% at 20,385.47

* Posts its biggest decline since July 6

* Materials sector falls 1.8% on lower gold prices

* Celestica jumps 9.3%

July 27 (Reuters) - Canada's main stock index fell on Thursday, including declines for gold mining shares, as a jump in bond yields dashed optimism that a peak in borrowing costs was at hand.

The Toronto Stock Exchange's S&P/TSX composite index ended down 176.17 points, or 0.9%, at 20,385.47, its biggest decline since July 6.

"It is on the back of bond yields rising," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.

Yields on Canadian government bonds and U.S. Treasuries climbed after a slew of robust U.S. economic data and as the European Central Bank raised interest rates for the ninth consecutive time.

The interest-sensitive real estate sector fell 2.3%, while materials, which includes precious and base metals miners and fertilizer companies, lost 1.8% as the price of gold fell.

Utilities was also a drag, falling 1.1%.

Still, the rise in yields was not seen as a game changer.

"I don't think that (it) is any reason to panic. If this pullback (in stocks) were to persist for a little while I think it would be a buying opportunity," Small said.

Celestica Inc was a bright spot. The electronics company's shares rose 9.3% after quarterly results that beat estimates. (Reporting by Fergal Smith in Toronto and Siddarth S in Bengaluru; Editing by Shilpi Majumdar and Alistair Bell)