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TORONTO (Reuters) - The Toronto Stock Exchange's main index plunged more than 600 points on Monday, its biggest drop since October 2000, as fears of a U.S. recession dragged the index to its lowest close in more than a year.
The S&P/TSX composite index closed down 604.99 points, or 4.75 percent, at 12,132.13 with all of its 10 sectors in negative territory. It was the biggest one-day net drop since October 25, 2000, when it closed down 840.26 points.
In the past five sessions, the S&P/TSX composite has lost more than 1,500 points, or 11.4 percent, wiping out all of 2007's gains. Monday was the lowest closing level since early November of 2006.
Resource issues led Monday's freefall, with the energy and materials sectors each giving up 5.7 percent. The groups have been stung by worries that demand for resources could be dampened by an economic slowdown.
Commodity prices weighed on the sectors, as oil and gold prices fell, following the direction of global stocks.
Suncor Energy tumbled $4.52, or 4.9 percent, to $88.32, while Potash Corp of Saskatchewan was down $5.93, or 4.7 percent, at $119.57.
The heavyweight financial sector shed 3.9 percent, with Royal Bank of Canada and Manulife Financial hitting 52-week lows. Royal finished down $1.79, or 3.8 percent, at $45.92, while Manulife was off 88 cents, or 2.4 percent, at $35.66.
The banking group has been hit by worries over fallout from the U.S. subprime mortgage meltdown and massive writedowns from financial institutions on both sides of the border.
Around the world, stocks slumped on jitters that a U.S. downturn could lead to a slowdown in global economic growth, while markets in the United States were closed for Martin Luther King Day.
"I think there's some people that have just thrown in the towel, as we can see, and took their signal from what happened overseas," said Brian Pow, vice-president, research and equity analyst at Acumen Capital Partners in Calgary.
Last week, the White House unveiled an economic stimulus plan that was panned by analysts and markets. On Friday, U.S. President George W. Bush called for a package worth up to $150 billion in tax cuts and other measures to boost the economy.
Analysts were unsure how much longer the nosedive could continue, but said the overall trend will be to the downside. All eyes will be on what U.S. markets do when they reopen on Tuesday.
"There's a great deal of uncertainty around," said John Ing, president of Maison Placements Canada.
"Every day there seems to be a new credit problem, there seems to be a disappointing corporate loss."
Despite a strong start for the TSX at the beginning of the year, the index was soon caught up in global uncertainty over the economic health of the United States, Canada's biggest trading partner.
The index is off 12 percent since the year began, and is 17 percent below the record close reached in July 2007.
Elsewhere on Monday, Quebecor World Inc was down 17 cents, or 50.8 percent, at 16.5 cents as it applied for creditor protection after conditions for a $400 million rescue financing were not met.
After the closing bell, the battered commercial printer said it had obtained the court protection.
Market volume was 333 million shares worth $5.5 billion. Decliners widely outpaced advancers 1,643 to 129. The blue chip S&P/TSX 60 index closed down 34.70 points, or 4.66 percent, at 710.51.
Editing by Rob Wilson