Canada's main stock index notched its lowest close in seven weeks on Monday, as the fallout from Britain's vote to leave the European Union pummeled financial stocks and energy shares fell with retreating oil prices.

The heavyweight financials sector fell 2.1 per cent, to its weakest since early April, as uncertainty over London's position as a global financial hub weighed and investors sought to calculate the likely hit to global economic growth.

Oil prices plunged about 2 percent amid a rallying dollar and market uncertainty in the aftermath of Thursday's vote, while Canadian banks fell in sympathy with European peers.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 202.09 points, or 1.45 per cent, at 13,689.79, its weakest close since May 9. Seven of its 10 main industry sectors fell, with three decliners for every gainer.

Offsetting the declines was a string of gold miners, as bullion maintained a two-year high hit on Friday.

"The (gold) equities are not overvalued, and we also view the commodity as having a lot more room to run," said James Winckler, research associate at MacNicol and Associates Asset Management.

He added that Brexit should not fundamentally alter the investment thesis for energy companies, which have recovered some of their sharp losses along with crude since early 2016.

"If you were bullish on a turnaround in oil, it shouldn't have changed your perspective," he said.

Four of the five most influential declines on the index were financial stocks, with Royal Bank of Canada RY.TO down 2.6 per cent to $75.20 and insurer Manulife Financial Corp MFC.TO off 5.1 per cent to $16.47.

Car parts manufacturers Magna International Inc MG.TO shed 6.4 percent to $44. Magna has nine manufacturing facilities in England and plans for another.

Meanwhile Fairfax Financial Holdings Ltd FFH.TO, expected to perform well in an economic downturn given its bets on low growth and low rates, added 1.9 percent to $677.80. It also bucked the falling financial services trend on Friday.

The energy group retreated 2.7 per cent, while industrials fell 1.6 per cent and technology stocks lost 2.7 per cent.

The materials group, which includes precious and base metals miners and fertilizer companies, was marginally lower.

The Brexit vote, which Federal Reserve Chair Janet Yellen had said would have significant repercussions on the U.S. economic outlook, is expected to scuttle the Fed’s ability to raise short-term interest rates.

Traders have virtually priced out an interest rate increase this year, according to CME Group’s FedWatch tool.

Oil prices fell about 2 per cent on Monday, weighed by a rallying dollar and continued market uncertainty over Britain’s shock vote to exit the European Union.

Brent and U.S. crude futures have lost about 7 per cent since Thursday’s settlement after the so-called Brexit vote sent global risk assets plummeting on Friday as investors fled to safe havens such as the dollar, U.S. Treasuries and gold.

Analysts at Goldman Sachs and other research houses sought to allay fears over the impact of the EU crisis on oil specifically, pointing out that Britain’s demand for fuel is negligible at the global level.

Oil prices rose slightly early on Monday on some of that sentiment, before slipping again. Market intelligence firm Genscape’s report of a draw of more than 1.3 million barrels at the Cushing, Oklahoma, delivery point for U.S. crude futures provided little support.

Brent crude was down $1 at $47.36 a barrel, while U.S. crude slipped $1.07 to $46.57.

The dollar was up almost 1 per cent, near Friday’s three-month high, making oil and other commodities priced in the greenback less attractive to holders of the euro and other currencies.

“We feel that a market shock such as Brexit can often induce enough chart damage to force a major long liquidation phase,” said Jim Ritterbusch of Chicago-based oil market consultancy Ritterbusch & Associates.

“But we don’t currently see such a development on the horizon given the crude market’s ability to maintain value above this month’s lows even through the Friday price plunge,” he added.

Goldman Sachs said even if U.K. economic growth suffered a 2-per-cent drop in response to Brexit - on the high end of its estimates - Britain’s oil demand would likely be reduced by only 1 per cent, or 16,000 barrels per day, or 0.016 per cent of global demand.

“This is extremely small on any measure,” Goldman Sachs analysts said in a note.

Morgan Stanley said it was more concerned about a growing glut in refined oil products.

“For near-term oil, we remain most concerned about product oversupply, China demand, the macro outlook, and the likely return of production,” it said in a note.

Chinese refiners have responded to the Asian oil products glut by exporting record amounts of gasoline and diesel fuel to regional markets, eroding refinery profit margins and swelling storage.

With files from The Canadian Press