Canadian stocks drop to two-week low after Norwegian wealth fund snubbed

By Fergal Smith

TORONTO (Reuters) – Canada's leading stock index fell to its lowest level in two weeks on Wednesday and fell against the U.S. dollar as hopes of a rapid economic recovery from the coronavirus crisis collapsed and that a large wealth fund put him on the list. black to some Canadian oil companies.

The $ 1 trillion Norwegian wealth fund, which operates according to ethical guidelines set by that country's parliament, said it excluded companies like Canadian Natural (NYSE 🙂 Resources Ltd (TO 🙂 and Suncor Energy

The focus on environmental, social and corporate governance (ESG) "is weighing on Canada's energy space," said Ben Jang, portfolio manager at Nicola Wealth.

The Toronto Stock Exchange's energy sector fell 5.4%, while the S & P / TSX () composite index fell nearly 3% to 14,440.27, its lowest level since April 27.

The drop in the index occurred when the chairman of the United States Federal Reserve. The United States, Jerome Powell, warned of an extended period of weak growth and stagnant income due to the coronavirus pandemic, putting pressure on American stocks. USA, which fell for the second day in a row.

Investors also experienced difficulties this week, fearing that the premature lifting of the blockades would lead to further virus outbreaks and renewed trade tensions between the United States and China.

"The traditional thought of buying sauce has become increasingly questionable," said Jang.

It seems likely that Canada and the United States will extend the non-essential travel ban until June 21 amid the new coronavirus pandemic, sources from both countries said.

The price of oil, one of Canada's main exports, fell almost 2% to $ 25.29 a barrel, while the Canadian dollar weakened by 0 , 2% to settle at 1.4098 against the dollar, or 70.93 cents US. The loonie touched its lowest intraday level since Thursday at 1.4107.

On Thursday, the Bank of Canada will release its annual financial system review, which will assess the main vulnerabilities of the Canadian financial system. Since March, the central bank has cut interest rates to almost zero and first introduced a large-scale asset purchase program.