PSEi falls to 15-mo low on China virus impact
Credit to Author: Tyrone Jasper C. Piad| Date: Wed, 26 Feb 2020 17:35:50 +0000
THE stock market tumbled out of the 7,000 territory on Wednesday following a massive global sell-off over the continued impact of the coronavirus disease 2019 (Covid-19) outbreak, with an analyst predicting a recession.
s central Hubei province in December, people in the East Asian country, Hong Kong and elsewhere were advised to wear face masks to prevent infection. AP PHOTOThe benchmark Philippine Stock Exchange index (PSEi) plunged by 3.86 percent or 277.60 points to finish at 6,909.84, while the wider All Shares fell by 3.19 percent or 136.05 points to end at 4,129.37.
The drop was the lowest since Nov. 13, 2018, when the main index settled at 6,843.83 — around the time the United States and China launched their trade war that ran well into the following year.
The PSEi has fallen by 905.42 points, or 11.59 percent year-to-date.
“The [local] market has been [experiencing a] relentless downturn following…the Covid-19 scare, [prompting] global indices” to fall, Philstocks Financial Inc. research analyst Piper Chaucer Tan said.
This pushed investors to sell off positions and shift funds to fixed-income securities and gold instead, he added.
Net foreign selling registered at P3.08 billion on Wednesday.
The outbreak is causing “an impending global slowdown, and some might say it can even go to [into a] technical recession, since China has a big role in the global supply chain, including the Philippines,” Tan said.
First a break out in the city of Wuhan in China’s central Hubei province in December, Covid-19 has spread to more than two dozen countries, killed more than 2,700 people —
including one, a Chinese tourist, in the Philippines — and infected over 81,000 others as of Wednesday.
Cases of the virus has been reported in new countries, and nations including Austria, Italy and Spain are imposing lockdowns, making traders increasingly fearful of the economic impact.
The World Health Organization has told countries to “prepare for a potential pandemic.”
“The market continued sliding downward following the decline [in] most equity markets around the world on negative investor sentiment, brought by” Covid-19 fears,
Timson Securities trader Darren Pangan added.
Wall Street ended in the red. The Dow Jones declined the steepest at 3.15 percent, while the S&P 500 and Nasdaq dropped at 3.03 percent and 2.77 percent, respectively.
Asian markets mirrored their US counterpart. Tokyo fell by 0.79 percent, China slid by 0.83 percent, Hong Kong dropped by 0.87 percent, Seoul plunged by 1.28 percent, Jakarta shed 1.59 percent, Singapore decreased by 1.05 percent, Thailand dove by 2.92 percent and Vietnam sank by 13.93 percent.
In Manila, all sectors had a bloodbath, with industrial and property taking the biggest hit at 4.42 percent and 4 percent, respectively.
Over 1.35 billion shares were traded for P10.06 billion.
Losers outpaced winners by a wide margin, 184-27, while 30 issues were unchanged.
WITH A REPORT FROM AFP