TORONTO (Reuters) - Toronto's main stock index tumbled more than three percent yesterday as investors fled the market amid a sharp drop in the price of oil and new concerns over the vitality of US banks.

Nine of the TSX's 10 sectors fell, including the heavily weighted energy and financials groups, which dropped 6.5 percent and 5.1 percent, respectively.

The resource-rich materials group was the sole winner, adding 2.7 percent on the day as investors sought out gold, which is considered a defensive investment.

The S&P/TSX composite index fell 311.5 points, or 3.3 percent, to close at 9,126.15.

Bruce Latimer, a trader at Dundee Securities, said it should be remembered that the day's drop, albeit sharp, comes after six straight weeks of gains for the Toronto benchmark index. The index has a year low of 7,479.96 set in early March.

"Most people I talk to are still in a fairly positive frame of mind," he said, adding that before yesterday, "the market has had a good bounce off its bottom without any significant pullback."

However, new concerns began to swirl around the health of US banks yesterday after Bank of America Corp. reported a surge in troubled loans, which overshadowed its better than expected earnings.

Bank of America shares plunged, taking with them much of the financial services sector both in Canada and the United States.

Canadian Imperial Bank of Commerce fell 6.3 percent to finish at C$50.52. Toronto-Dominion Bank fell 5.4 percent to C$47. National Bank of Canada tumbled 5.8 percent to C$43.75.

Energy issues also retreated, driven lower by a more than 8 percent drop in the price of oil. EnCana gave up 5.1 percent to C$52.58 and Suncor Energy dropped 7.7 percent to C$28.90.

"It's really a very ugly day," said John Kinsey, portfolio manager at Caldwell Securities Ltd.

Investors appeared eager to buttress their defensive positions, however, driving up gold stocks such as Agnico-Eagle Mines. The company was the day's biggest net gainer, jumping 10.6 percent to finish at C$58.59.

Barrick Gold rose 8.4 percent to C$36.16.