By Peter Henderson, The Canadian Press

Toronto:  Plunging oil prices dragged down the Toronto stock market by more than 300 points, about 2.4 per cent in mid-afternoon trading, as the Canadian dollar fell to levels not seen in more than a decade.

The price of oil also dropped $2.25 to US$37.85 a barrel, falling to levels not seen since the 2008 financial crisis roiled world markets.

The Organization of Petroleum Exporting Countries said Friday it would maintain current production levels for the next six months even as a worldwide supply glut shows no signs of easing.

Oil has dropped from a high above US$110 in July 2014 as OPEC has pumped up supply while demand from big consumers such as China has sagged.

Canada’s oil-sensitive loonie dropped nearly 0.8 of a cent from Friday’s close to 74.03 cents U.S. at noon on Monday.

The dollar last closed below 74 cents U.S. on June 23, 2004.

The Toronto stock market had fallen by 313.50 points, or 2.36 per cent, as of 2:25 p.m. ET, putting the index on track towards the biggest one-day decline since late September.

The metals and mining sector was the biggest loser on the day, down 7.5 per cent, while the energy subsector was down 5.8 per cent.

New York markets were also down, although they fell by less than the Canadian index

The Dow Jones industrial average was down 118.89 points, or 0.7 per cent, the broader S&P 500 index fell 16.25 points, or 0.8 per cent, and the Nasdaq declined 40.39 points, or 0.8 per cent.

The February gold contract fell $5.50 to US$1,080 per troy ounce. The January contract for natural gas was down 8.6 cents at US$2.073 per mmBtu.