OTTAWA, Oct 6, 2008 (AFP) - The Toronto Stock Exchange plunged more than 10 percent at its opening Monday, amid fears of deepening US-led worldwide economic woes and predictions of a recession in Canada.

The S&P/TSX Composite Index dropped 1,149 points to 9,654.61 points, or 10.63 percent, in early trading before bouncing back slightly.

The fall, led by a flight from resource stocks, was the largest one-day decline in two decades.

One of Canada's five big banks meanwhile said in a report Monday that Canada and the United States were on the verge of a recession that could persist well into 2009.

Scotiabank predicted Canada's housing market would continue to slow, exports to the United States would drop and unemployment would rise as firms cut back on expenses.

But a recession here, it said, would be less severe than in the United States, Canada's largest trading partner.