TORONTO (Reuters) - The Toronto Stock Exchange's main index closed sharply lower yesterday, as investors locked in profits after the previous session's big gains, amid weak commodity prices and fears for the health of the US economy.

Financial shares were rattled by fresh worries over the ongoing impact of the global credit squeeze, after big US banks Citigroup and Bank of America were hit by broker downgrades.

A fall in commodity prices also weighed on the market, just one day after the TSX came within reach of a record high.

Oil and gold both reached record peaks in Wednesday's session, helping propel the resource-laden TSX more than 300 points higher.

The lion's share of those gains were wiped out on Thursday as the S&P/TSX composite index closed down 252.46 points, or 1.7 percent, at 14,372.54 with all of its 10 main groups finishing lower.

"What a difference 24 hours makes," said Sal Masionis, stockbroker at Brant Securities. "Yesterday we couldn't get enough of these stocks and today everybody's all nervous."

"I think rumours of (Citigroup) cutting a dividend all of a sudden affected all your financials and started the ball rolling in a sort of a panic," Masionis added.

Financials, the largest sector, sagged two percent on the renewed credit fears, with Bank of Montreal down C$1.21, or 1.9 percent, at C$61.79 while Toronto-Dominion Bank fell C$1.46, or 2.1 percent, to C$69.89.

Heavyweight energy issues fell 1.1 percent as crude fell $1.04 to settle at $93.49, after hitting a record high above $96 overnight.

Suncor Energy was down C$2.44, or 2.4 percent, at C$101.01 and Petro Canada fell C$1.17, or 2.2 percent, to C$53.33.

Gold retreated from its 28-year high to fall to $788.90 an ounce, sending the resource-laden materials sector down 3 percent.