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* Oil and gas sector falls 14 pct, leads market tumble
* Scotiabank sees Canadian recession
* Financial group declines after European selloff (Adds details)
TORONTO, Oct 6 (Reuters) - The Toronto Stock Exchange's main index tumbled on Monday, hitting its lowest level in more than three years as oil prices fell and Bank of Nova Scotia forecast a recession in Canada.
Bank of Nova Scotia (BNS.TO) said it expects the Canadian economy to head into recession and a Scotiabank economist said that by next summer there will be little or no growth in Canada [ID:nN06331854]
Recession concerns heightened as oil fell to an eight-month low below $90 a barrel. Toronto's energy sector led the index lower, down 14 percent. Canadian Natural Resources (CNQ.TO) was among the top net losers, down 14 percent to C$54.92.
Shortly after 10:15 a.m. (1415 GMT), the S&P/TSX composite index .GSPTSE was down 801.07 points, or 7.42 percent, at 10,002.28 with all 10 main groups in the red. Shortly after, it fell below 10,000 for the first time since July 2005.
The sour mood also came as several bank rescues in Europe increased concern about the stability of global financial institutions. Toronto's financial group fell 3.9 percent.
Scotiabank said it will spend C$2.3 billion to buy Sun Life Financial's (SLF.TO) stake in CI Financial CIX_u.TO. [ID:nN06280146] Shares of CI were up 0.3 percent at C$16.69. Scotiabank fell 4.7 percent to C$44.94, while Sun Life Financial eased 10 percent to C$32.39.
$1=$1.10 Canadian Reporting by Ka Yan Ng; Editing by Peter Galloway