A plunge in energy stocks led a broad-based sell-off in Canadian equities on Thursday that saw the benchmark index shed nearly 300 points.

The S&P/TSX composite index plummeted 298.76 points, or 3.4%, to 8,425.35.

The index had opened at 8,596.67, down 127.44 points from Tuesday’s close, following technical problems that halted trading during Wednesday’s session.

Oil futures dropped for a second day despite Wednesday’s news that OPEC would cut production levels in January. Crude for January delivery slid US$3.84, or 9.6%, to end at US$36.22 a barrel on the New York Mercantile Exchange — its lowest level since mid-2004.

The energy group on the TSX was slammed with a 7.2% drop as oil prices fell.

Shares of Canadian Natural Resources Ltd. fell 7% to $45.10 and Nexen Inc. dropped 8% to $20.58.

EnCana Corp. shares dipped 4.5% to $54.50 and Petro-Canada fell 8.1% to $26.90.

Also down was Suncor Energy Inc., lower by 7.2% to close at $24.80.

The materials group also took a hit on Thursday, tumbling 5.7% after gold, copper and other commodity prices retreated. Gold for February delivery fell US$7.90, or 1%, to end at US$860.60 an ounce on the New York Mercantile Exchange.

The sub-gold index dropped 7.8%.

Kinross Gold Corp. plunged 11.6% to $19.68 and Goldcorp Inc. fell a hefty $4.86, or 12.4% to $34.49.

Barrick Gold Corp. slid 5.3% to $40.50 and Agnico-Eagle Mines Ltd. fell $4.37, or 7.7%, to $52.79.

Financial stocks fell 1.8% on the TSX, led by a drop for shares of National Bank of Canada. The stock retreated on concerns over National Bank’s holdings of asset-backed commercial paper, after foreign banks supporting the ABCP restructuring plan threatened to walk away unless the deal goes through this week.

Shares of TMX group fell 1.6% following Wednesday’s technical glitch that halted trading on its main exchange. TMX shares closed at $24.21.

Manulife Financial Corp dipped 1.5% to $20.30 and CI Financial Income Fund fell 3.1% to $13.57.

Other financial firms gained ground, including Sun Life Financial, up 1.7% to $24.92, and Power Corp., up 1.6% to $21.00.

Also, shares of Fairfax Financial Holdings Ltd. surged $22.02, or 6.1%, to $382.26.

The S&P/TSX Venture composite index fell 23 points, or 3.2%, to end the day at 700.45.

The Canadian dollar retreated US0.68¢ to finish at US82.88¢.

A drop in energy stocks also led declines for American stock markets on Thursday.

The Dow Jones industrial average tumbled 219.35 points, or 2.5%, to finish at 8,604.99.

The Nasdaq composite index fell 26.94 points, or 1.7%, to 1,552.37.

The S&P 500 index dipped 19.14 points, or 2.1%, to close at 885.28.

IE