Energy stocks dragged Canada's main stock index on Monday after oil prices tumbled on concerns that tighter coronavirus-led restrictions in Europe would lead to a slower fuel-demand recovery.

The energy sector plunged 3.7%, as both US crude and Brent crude fell about 4.2%.

At 9:40 a.m. ET (1440 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 159.54 points, or 0.91%, at 17,375.0, hitting its lowest level in nearly three weeks.

Oil producer Vermilion Energy Inc fell 6.8%, the most on the TSX, and the second biggest decliner was airlines Air Canada, down 6.8%.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.2% as gold futures slipped.

On the TSX, 45 issues were higher, while 174 issues declined for a 3.87-to-1 ratio to the downside, with 21.40 million shares traded.

The largest percentage gainer on the TSX was Great Canadian Gaming Corp, which jumped 17%, after the casino operator agreed to be acquired by a fund managed by an affiliate of Apollo Global Management for an increased purchase price.

Its gains were followed by gold miner New Gold Inc , which rose 2.8%.

The most heavily traded shares by volume were Baytex Energy Co, Air Canada and Suncor Energy Inc .

The TSX posted no new 52-week high and no new low.

Across all Canadian issues there were 18 new 52-week highs and three new lows, with total volume of 54.19 million shares.