TORONTO (Reuters) - Toronto's main stock index notched its steepest percentage drop since early October yesterday as investor confidence was shaken by intensifying concerns about sovereign debt in some euro zone countries.

Investors flocked to the safety of US Treasury bonds and the greenback, which also took flight on lacklustre US jobs data. The strength in the greenback weighed heavily on the price of oil, which plunged five percent to $73.14 a barrel, as well as on the price of gold, which hit a three-month low of $1,060.50 an ounce.

Barrick Gold topped the list of influential names on the downside, sliding 4.2 percent to C$36.45, while Suncor Energy dropped three percent to C$31.71. Potash Corp. of Saskatchewan sank five percent to C$109.15.

"It's an aversion to risk and that's caused the US dollar to go up and, of course, on days like this you track the US dollar and US treasuries. All the other things fall off." said Paul Gardner, partner & portfolio manager at Avenue Investment Management.

The Toronto Stock Exchange's S&P/TSX composite index tumbled 261.7 points, or 2.3 percent, to 11,128.76, with eight of the index's 10 main groups lower. Materials led the slide with a 5.1 percent drop.

The Toronto index's drop mirrored sell-offs in international markets from New York to London, with sentiment beaten down in part on Greece's fiscal troubles.

Those worries have raised questions about the sustainability of public finances in other euro zone countries, such as Spain and Portugal, after the global recession sparked surges in public debt and budget deficits.