* TSX drops below 8,000 for first time since Dec. 5
* Financials down 6.7 pct, lead TSX lower (Adds details, quote)
TORONTO, Feb 20 (Reuters) - Toronto’s main stock index fell more than 3 percent on Friday afternoon as the energy group dropped on falling oil prices and financial shares were hit by worries over the health of European banks and concern that the U.S. government’s bank rescue plan might involve nationalization. [ID:nN20201566]
The big energy group sank 5.4 percent as oil retreated to below $38 a barrel, hit by the worsening economic outlook. [ID:nSIN420478] Suncor Energy (SU.TO) sank 7.5 percent to C$22.15.
“I think it’s more just worries about the financial markets, particularly the banks in Europe, and that seems to have spread to North America,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
“The U.S. banks are getting pretty badly beaten up, too.”
At 1:47 p.m. (1847 GMT), the S&P/TSX composite index .GSPTSE was down 294.38 points, or 3.6 percent, at 7,890.97, with nine of its 10 main groups lower. The index was at its lowest levels since Dec. 5.
On the upside, the materials group gained 1.2 percent as bullion pierced the $1,000 an ounce level, boosted in part by tumbling world markets as investors sought a safe haven. [ID:nN20262943]
$1=$1.25 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway