* TSX down 0.55 percent at 13,258.57
* Late day drop by materials more than offsets oil rally (Updates to close)
TORONTO, Jan 21 (Reuters) - Toronto's main stock index finished lower for a third straight day on Friday, accelerating its decline toward the close on a late-day selloff in the materials group.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, which was largely flat for much of the afternoon, finished down 72.75 points, or 0.55 percent, at 13,258.57.
Seven of the index's 10 main groups ended lower, pressured by a sharp 1.7 percent drop in materials, a lot of it in the final minutes of the session.
"(It was) a tug of war between energy stocks and material stocks today," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.
The weakness in materials was broad-based, with base and precious metals miners falling. The price of bullion notched its third weekly loss, while copper stabilized after falling to a one-month low.
Teck Resources TCKb.TO shed 2.67 percent to C$58.66, while Barrick Gold (ABX.TO) lost 1.03 percent to C$46.33.
The overall decline was cushioned by a rally in the oil and gas sector, which rose 1.08 percent.
It was the strength in the price of natural gas that was driving energy issues on Friday, rather than U.S. crude oil, which was softer on rising supply. Warne noted that cold weather and higher heating demand were helping to push up natural gas prices.
Advancers included Suncor Energy (SU.TO), up 1.04 percent at C$38.06, while Talisman Energy TLM.TO rose 2.24 percent to C$22.34.
The index advanced strongly at the beginning of the session, spurred by rising U.S. stock markets and better than expected profit from General Electric (GE.N) and higher net revenues from Google Inc. (GOOG.O) [.N] (Reporting by Ka Yan Ng; editing by Rob Wilson)