June 11, 2020 / 8:48 PM / a month ago

WRAPUP 1-Canadian stocks, loonie tumble as coronavirus case increases spook investors

    * TSX closes down 4.1% at 15,050.92
    * Canadian dollar slides 1.5% against the greenback
    * Price of U.S. oil decreases 8.2%
    * Canadian bond yields fall across a flatter curve

    By Fergal Smith
    TORONTO, June 11 (Reuters) - Canada's main stock market
index fell on Thursday by the most since March and the loonie
tumbled against the U.S. dollar as investors grew nervous about
a potential second wave of coronavirus infections that could
slow economic recovery.
    The Toronto Stock Exchange's S&P/TSX composite index
          closed down 4.1% at 15,050.92, its largest decline
since March 27. Before the session's setback, the index had
rebounded more than 40% from its March 23 trough.
    "Maybe we need to take a step back and realize that perhaps
there still is some risk out there, especially surrounding this
coronavirus," said Kevin Headland, senior investment strategist
at Manulife Investment Management. "We're not completely out of
the woods just yet."
    Several U.S. states have seen coronavirus cases jump in
recent days, causing great concern among experts who say
authorities are loosening restrictions too early.             
    "I don't necessarily think this will be the beginning of a
wider downside move unless there is a bigger issue in play of a
second wave of COVID(-19)," Headland said.
    Shares on Wall Street were also down sharply as data showing
U.S. jobless claims at still more than double their peak during
the Great Recession added to investor concerns. There was also a
cautionary economic forecast from the Federal Reserve on
Wednesday.             
    New Bank of Canada Governor Tiff Macklem, already facing the
double whammy of the coronavirus pandemic and slumping oil
prices, must now also contend with the Fed forecast that the
United States expects years of slow growth.                 
    The energy sector           on the TSX ended down nearly 10%
as oil prices plunged. U.S. crude oil futures        settled
8.2% lower at $36.34 a barrel, pressured by renewed concerns
about demand destruction and a record buildup in U.S. crude
inventories.             
    The Canadian dollar        was trading 1.5% lower at 1.3616
to the greenback, or 73.44 U.S. cents, its biggest decline since
April 15. On Wednesday, the currency notched its strongest
intraday level in more than three months at 1.3311.
    Canadian government bond yields were lower across a flatter
curve, with the 10-year             down 4.6 basis points at
0.520%.

 (Reporting by Fergal Smith; Editing by Peter Cooney)
  
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