TORONTO (Reuters) – The Toronto Stock Exchange's main index ended a choppy session lower yesterday, dragged down by resource shares that fell with commodity prices, while uncertainty continued to surround the US bailout proposal.

Companies tied to oil, gold and other commodities slid, with the heavyweight energy and materials sectors providing the lion's share of losses on worries of slowing global growth and demand for resources.

In the oil patch, Canadian Oil Sands Trust was down 4.3 percent at C$41.54, while fertiliser firm Potash Corp of Saskatchewan tumbled 9.7 percent to C$167.80.

Uncertainty over the shape and outcome of the $700 billion financial sector bailout in the United States added volatility to the market as US lawmakers heard testimony on the plan through the day.

But Toronto's financial sector pushed higher as investors saw optimism in the performance of the Canadian banks compared with their US peers.

"(Canadian banks) did get beat up a bit and I think the feeling is that the Canadian financials may be divorced a bit from what's happening to US financials," said John Kinsey, portfolio manager at Caldwell Securities Ltd.

The S&P/TSX composite index closed down 105.44 points, or 0.83 percent, at 12,532.63 with six of its 10 main sectors falling. The index traded in a more than 300-point range from peak to trough during the day.

The financial sector led the upside, rising 2.1 percent, with Canadian Imperial Bank of Commerce up 3 percent at C$62.27, and Bank of Nova Scotia gaining 3.3 percent to C$49.38.

In the United States, officials urged Congress to act swiftly on a plan to buy up bad mortgage debt from financial institutions to ease problems in the credit market. The plan had helped the Toronto market rally late last week, but concerns over the effectiveness of the proposal, as well as uncertainty over the details, have rattled stocks this week.

"There was a reaction of relief last week when it was announced, but now in the hard light of day people are saying, 'How are they going to do it and what's really involved here'?" Kinsey said.

The energy and materials sectors fell two percent and 4.7 percent respectively, as oil and gold prices fell, pressured by fears of stalling demand and by a stronger US dollar. Agnico-Eagle Mines was down 2.7 percent at C$66.50, while Husky Energy gave up 3.6 percent to C$41.76.