May 13, 2020 / 7:50 PM / 24 days ago

WRAPUP 2-Canadian stocks, dollar fall after snub from Norway's wealth fund

 (Updates prices)
    * TSX falls 2.5% to its lowest close since April 24
    * Toronto market's energy sector declines 5.6% 
    * Canadian dollar dips 0.2% against the greenback
    * Canadian government bond yields trade mixed across flatter
curve

    By Fergal Smith
    TORONTO, May 13 (Reuters) - Canada's main stock market index
tumbled to a three-week low on Wednesday and the loonie fell
against the U.S. dollar as hopes ebbed for a quick economic
recovery from the coronavirus crisis and a major wealth fund
blacklisted some Canadian oil companies.
    Norway's $1 trillion wealth fund, which operates under
ethical guidelines set by that country's parliament, said it was
excluding companies such as Canadian Natural Resources Ltd
         and Suncor Energy Inc         for producing excessive
greenhouse gas emissions.             
    The focus on environmental, social and corporate governance
(ESG) is "weighing on the energy space in Canada," said Ben
Jang, portfolio manager at Nicola Wealth.
    The Toronto Stock Exchange's energy sector fell 5.6%, while
the S&P/TSX composite index           ended down 2.5% at
14,503.21, its lowest closing level since April 24.
    The decline for the index came as U.S. Federal Reserve
Chairman Jerome Powell warned of an extended period of weak
growth and stagnant incomes due to the coronavirus pandemic,
pressuring U.S. stocks, which fell for a second straight day.
            
    Investors have also had to contend with worries that the
premature lifting of lockdowns could lead to additional
outbreaks of the virus Renewed U.S.-China trade tensions are
also a worry.
    "The traditional thinking of buying the dip has become more
and more in question," Jang said.
    Canada and the United States appear likely to extend a ban
on non-essential travel until June 21 amid the novel coronavirus
pandemic, sources in both nations said.             
    The price of oil       , one of Canada's major exports,
settled 1.9% lower at $25.29 a barrel, while the Canadian dollar
weakened 0.2% to 1.4101 to the greenback, or 70.92 U.S. cents.
The loonie touched its weakest intraday level since last
Thursday at 1.4113.
    The Bank of Canada is due to release on Thursday its annual
financial system review, which will assess the main
vulnerabilities of the Canadian financial system. Since March,
the central bank has slashed interest rates to near zero and
introduced for the first time a large-scale asset purchase
program.
    Canadian government bond yields were mixed across a flatter
curve on Wednesday, with the 2-year            up 3.1 basis
points at 0.306%.

 (Reporting by Fergal Smith; Editing by Nick Zieminski, Peter
Cooney and David Gregorio)
  
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