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*TSX sinks 9.3 pct; erases Friday's 5.9 rise
*Energy shares fall as oil falls below $50 barrel
*Grim U.S. manufacturing data stirs concern about Canada (Adds details, comment)
By Cameron French
TORONTO, Dec 1 (Reuters) - Toronto's main stock index tumbled 864 points on Monday, its deepest net drop ever, as sliding commodity prices, gloomy U.S. economic news and the urge to take profits after six straight days of gains prompted a sell-off that hit every market sector.
Resource issues led the market lower as OPEC's deferral of any new oil supply cuts stung energy shares. U.S. crude sank $5.15 to $49.28 a barrel, its lowest settlement since May 2005.
Materials stocks were undercut by falling gold prices and in increasingly gloomy economic view.
Data showing Canada's economy grew at a faster-than-expected 1.3 percent in the third quarter was ignored in the face of a report showing falling U.S. factory activity. Even more disturbing was a declaration from the U.S. National Bureau of Economic Research that the United States has been in recession since December 2007.
"We were coming off a pretty decent run last week, but no such luck (today)," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
"There's so much concern about what the global economy's doing, and there this big massive sell-off in commodity prices."
The S&P/TSX composite index .GSPTSE fell 864.41 points, or 9.3 percent, to 8406.21. The drop eclipsed an 840.93 point drop on Sept. 29, 2008. The percentage decline was the second biggest ever.
All 10 TSX subgroups fell, with materials issues dropping 13.7 percent, and energy stocks falling 13.3 percent.
Among energy stocks, Talisman Energy TLM.TO dropped C$2.14, or 17.2 percent, to C$10.27, while Suncor Energy (SU.TO) retreated C$4.65, or 16.3 percent, to C$23.90.
In the materials sector, Goldcorp (G.TO) plunged C$5.85, or 16.7 percent, to C$29.15, while Teck Cominco TCKb.TO fell C$1.04, or 17.3 percent, to C$4.96.
Financial services, which along with the resource sectors make up the bulk of listed stocks, fell 8.4 percent, hurt by the economic news -- which included data showing falling U.S. factory activity -- and concerns about more losses for U.S. bank Citigroup (C.N).
"It's an ugly day today," said John Ing, president of investment dealer Maison Placements in Toronto.
"The lack of consensus as far as OPEC was concerned, the continuation of the talk about CITIbank, all of these contributed to a lousy market."
The decline followed six straight days of gains that had taken the index up by 20 percent from a five-year low hit on Nov. 20.
"Every time you have a mini-rally in, the selling comes back in again," said Picardo.
U.S. stocks also fell hard. The Dow Jones industrial average .DJI retreated 679.95 points, or 7.7 percent, to 8,149,09, while the Nasdaq composite .IXIC sank 137.50, or 8.95 percent, to 1,398.07.
$1=$1.25 Canadian Reporting by Cameron French; Editing by Frank McGurty