(Adds portfolio manager quotes and details on prime minister's comments, updates prices)
* TSX closes down 29.24 points, or 0.2 percent, at 14,566.26
* Index falls 1.1 percent for the week
* Nine of TSX's 10 main groups retreat, materials gain
By Fergal Smith
TORONTO, Oct 7 (Reuters) - Canada's main stock index fell on Friday as lower oil prices weighed on energy stocks and an unfavorable regulatory ruling pressured the shares of telecom companies.
For the week, the index fell 1.1 percent. Still, it has rallied more than 26 percent since hitting a 3-year low in January.
"Markets are definitely taking a breather," with investors mindful of a Canadian market holiday on Monday for Thanksgiving Day and the upcoming third-quarter earnings season, said Youssef Zohny, portfolio manager at StennerZohny Investment Partners of Richardson GMP.
"I think there is maybe some nervousness going into earnings season given the last few quarters in the United States were a little underwhelming," said Zohny.
Telecoms fell 1.2 percent after a regulator said major internet service providers must lower the wholesale rates they charge smaller rivals for access to their networks.
Rogers Communications Inc lost 1.9 percent to C$54.20, Telus Corp fell 1.3 percent to C$42.30, and BCE Inc declined 0.9 percent to C$59.43.
The energy group fell 0.5 percent as oil fell.
Canadian Natural Resources Ltd fell 0.7 percent to C$42.39, while U.S. crude oil futures settled down 63 cents at $49.81 a barrel as investors took profit after recent gains.
The Toronto Stock Exchange's S&P/TSX composite index closed down 29.24 points, or 0.2 percent, at 14,566.26. Nine of the index's 10 main groups ended lower.
A U.S. presidential debate on Sunday "could add some volatility to markets," Zohny said.
Canadian Prime Minister Justin Trudeau told a Reuters Newsmaker event in Toronto he was not overly worried about the future of the North American Free Trade Agreement (NAFTA), even though the main U.S. presidential candidates have said they want to change the deal.
The materials sector, which includes precious and base metals miners and fertilizer companies, was the only one of 10 main groups to move higher, gaining 0.4 percent. It was helped by gold rising off of a four-month low after a slowdown in U.S. employment growth which could leave the Federal Reserve more cautious about raising interest rates.
Barrick Gold Corp gained 1.6 percent to C$20.91 and Goldcorp Inc added 0.4 percent to C$18.72.
Canada added far more jobs than expected in September and the Bank of Canada said that Canadian companies' hiring and investment intentions improved modestly in the third quarter, while resource firms believe the sector may be bottoming out after prolonged weakness. (Additional reporting by Alastair Sharp; Editing by Bernadette Baum and Grant McCool)