Stocks in Toronto and New York fell sharply Monday, as slumping oil prices flustered investors amid growing fears of a global economic slowdown.

Crude oil futures lost almost four per cent to settle at $29.69 US a barrel, as a meeting between OPEC producers Saudi Arabia and Venezuela provided little indication that steps would be taken to boost prices.    

The benchmark index of the Toronto Stock Exchange got off to a broadly negative start and it didn't improve much. The S&P/TSX composite index closed with a loss of 229 points, or 1.8 per cent, at 12,535.

The energy, financial and health groups were among the main losing sectors.

 The materials group, which includes the gold producers, was the lone advancer. Gold surged $40 to $1,198 US an ounce — an eight-month high. Analysts said bullion was benefiting from risk aversion that is sweeping through financial markets. 

The Canadian dollar slipped 0.13 cents to close at 71.77 cents US.

The Dow Jones industrial average, which at one point was down 400 points, ended with a loss of 178 points, or 1.1 per cent, to 16,027. Technology stocks, financials and energy shares were among the biggest losers.  

The broader S&P 500 index slid to its lowest level since April 2014, closing at 1,853, down 1.4 per cent.

"Equities are in a 'go-nowhere-fast' mode, with a downward bias in the near term," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

"We need oil to stabilize to provide some confidence for investors, partly because to a degree, investors' stress is high, earnings visibility is low, and market internals continue to weaken," he said.

Overseas, European shares plunged to 16-month lows on Monday. Germany's DAX index fell 3.3 per cent, while France's CAC 40 dropped 3.2 per cent and the FTSE 100 index in London slid 2.7 per cent. 

With files from Reuters