UPDATE 7-Toronto stocks drop 7 pct as U.S. rejects bailout

Mon Sep 29, 2008 5:32pm EDT
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* U.S. lawmakers reject $700 bln plan, raising uncertainty

* Energy sector tumbles 10.6 pct as oil slides below $97

* Financial services drop 5.8 pct as bank jitters spread (Adds analyst comments, details, updates figures)

By Cameron French

TORONTO, Sept 29 (Reuters) - The Toronto Stock Exchange's main index tumbled nearly 7 percent on Monday, the biggest drop in eight years, as U.S. lawmakers rejected a proposed $700 billion bailout of the financial services sector, sending investors fleeing for the exits.

As the U.S. House voted to reject the Wall Street rescue plan, concerns mounted that the fallout from the crisis in the United States was spreading rapidly around the globe and that the world economy was headed for a sharp downturn.

The S&P/TSX composite index .GSPTSE dropped 840.93 points, or 6.93 percent, to 11,285.07, its biggest percentage drop since October 2000, when markets were roiled by the bursting of the tech bubble. On a points basis, it was the biggest decline ever.

"This is yet another Black Monday," said John Ing, president at Maison Placements Canada.

Fueling the carnage on the market was a $10 drop in the price of oil, prompted by rising concerns of a global slowdown, which sent the heavily weighted energy sector down more than 10 percent. [ID:nN29389346].   Continued...