TORONTO (Reuters) - The Toronto Stock Exchange's main index dropped more than 200 points yesterday to a two-and-a-half month low as lower commodity prices hit resource stocks, while resurgent credit concerns yanked the shares of the big banks lower down.

Also weighing were shares of grocery giant Loblaw Cos , which tumbled to a seven-year low after posting a 42 percent drop in third-quarter profit, well below expectations.

The Toronto Stock Exchange's S&P/TSX composite index ended down 250.11 points, or 1.82 percent, at 13,524.43, after earlier falling as low as 13,450.75, its lowest point since late August.

The plunge in Loblaw shares pulled the consumer staples subgroup down 3.95 percent, but a larger impact was felt by the heavyweight materials and financials groups, which dropped 3.28 percent and 1.98 percent, respectively.

All told, nine of the index's 10 subgroups were lower.

"It's just a very very bad day here in Toronto. Everybody's getting beaten up," said John Kinsey, portfolio manager at Caldwell Securities.

Falling prices for both precious and base metals weighed on materials stocks such as Goldcorp , which fell four percent to C$30.92, and Barrick Gold , down 3.4 percent at C$39.76. Also in the sector, Potash Corp fell 4.5 percent to C$108.09.

Financials were led lower by the big banks, as persistent credit worries were amplified by Bank of Canada moves to inject C$1.6 billion into markets to defend its overnight interest rate and improve liquidity.

Royal Bank of Canada , the country's biggest bank, fell 2.5 percent to C$51.09, while Canadian Imperial Bank of Commerce retreated four percent to C$88.57.

Some Canadian banks have already announced writedowns due to turmoil in the US sub-prime mortgage market.

"The fear is it's going to continue to be much worse than that and extend into next quarter," said Michael Sprung, president of Sprung & Co. Investment Counsel.