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

As the US 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 dropped 840.93 points, or 6.9 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.

Fuelling the carnage on the market was a $10 drop in the price of oil on rising concerns of a global slowdown, which sent the heavily weighted energy sector down more than 10 percent..

That, along with concerns over base metals prices and general nervousness over the bailout package, kept stocks under pressure for most of the session.

But the picture got worse at mid-afternoon, with the index plunging 300 points in just over five minutes as results showed the congressional vote going against the plan.

"The first thing that all the people did was hit the sell button," said Andrew Martyn, portfolio manager at Davis-Rea. "Uncertainty is not the friend of this market."

All 10 TSX subgroups ended down, with energy stocks led lower by Canadian Natural Resources , which fell 19 percent at C$65.27, and Talisman Energy , which dropped 12.9 percent to C$14.04.