Oil and gas shares led prices sharply lower on the Toronto Stock Exchange today as the market leaders suffered bone-jarring declines.

The widely-followed TSE composite index took its third-largest drop on record with a 27.6 fall.

The oil and gas stocks, many of them also listed in New York, have been the market leaders on hopes for exploration successes in the Beaufort Sea area of the Canadian Arctic. But growing uncertainty and pessimism concerning Arctic activity sent the group lower.

Dome Petroleum, the leader of the Beufort group dropped $2.38 to $40.50. Gulf Canada with a 25 percent stake in the Dome program dropped $2.50 to $71.75.

Gulf Canada, strong recently on an exploratory well off the coast of Newfoundland, slumped $2.50 to $71.75. Other losers: Texaco Canada, down $1.75 to $75.25, BP Canada off 63 cents at $32.13, Shell Canada, off 63 cents at $26.63. Ranger fell $1.13 to $30.75.

Major metal producers, at record levels recently on soaring copper pries, also suffered big drops, Inco, a big nickel producer, fell 75 cents to $24. Alcan, a diversified aluminum producer, was off 50 cents at $45.25. Norlanda, a major copper producer, dropped 88 cents to $17.88 and Texas Gulf slumped $1.25 to $31.75. Hudson's Bay Mining was down 88 cents to $24.88 and Cominco dropped $2.00 at $46.

The Toronto market, the biggest exchange in Canada, reached a record high at the end of August. Hectic trading this year raised the value of trading in the first eight months to a record for any full year in its history.