The stock market plunged Wednesday along with the rest of Asia following a rout on Wall Street as traders are faced with a perfect storm of crises including China’s COVID-linked economic woes, US interest rate hikes, soaring inflation and the Ukraine war.
The Philippine Stock Exchange Index sank 116.11 points, or 1.7 percent, to 6,863.91 on a value turnover of P8.8 billion. Losers overwhelmed gainers, 138 to 49, with 43 issues unchanged.
Solar Philippines Nueva Ecija Corp., which is building the biggest solar farm in Southeast Asia, fell 8.2 percent to P1.56, while BDO Unibank Inc. of the Sy Group, the largest lender in terms of assets, slipped 2 percent to P128.40
Major property developer Ayala Land Inc. of the Ayala Group declined 3.4 percent to P34, while its real estate investment trust company AREIT Inc. dropped 6.6 percent to P39.90.
The rest of Asian markets were back in negative territory Wednesday.
The downbeat mood across the world has been compounded by weak earnings from some of the world’s biggest companies, while pledges of support from Beijing have largely fallen on deaf ears.
Tech firms, who rely on debt to drive growth, led a plunge in New York on fears that the Federal Reserve is at the beginning of a period of sharp rate increases aimed at taming scorching inflation.
The numerous issues around the world are acting as a massive drag on sentiment, with many worrying about the global economic outlook.
While about 80 percent of S&P 500 firms reporting so far have beat expectations, National Australia Bank’s Ray Attrill said misses by high-profile names were taking the spotlight.
This came “amid deepening concerns that corporate earnings, however strong now, cannot usurp the stiffening (global) economic headwinds stemming primarily from the ongoing war in Ukraine and China’s COVID-zero policy.”
China’s Omicron crisis has seen officials lockdown Shanghai, the country’s biggest city, while there are fears Beijing will soon follow as infections continue to rise there.
That has raised concerns about already strained supply chains and that a crucial driver of world growth is enduring a serious economic slowdown.
Most Asian markets tracked Wall Street down.
Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, Bangkok, Mumbai and Jakarta were all well down.
But Shanghai bounced following a report that Xi Jinping had committed to boosting infrastructure construction as a means of accelerating the economy. Hong Kong edged up slightly.
“Infrastructure is an important support for economic and social development,” Xi said at a high-level meeting on Tuesday, according to the official Xinhua news agency.
The comments were the latest from China’s top brass, who have made a series of promises in recent weeks to kickstart growth, but analysts said the key cause of worry for investors was the leaders’ refusal to back away from their COVID strategy.
“The market is no longer responsive because there’s no easing up of the negative in view right now,” said Yang Ziyi, at Shenzhen Sinowise Investment.
“We just need to wait. We saw the same kind of numbness towards vocal support during the burst of the 2015 bubble and in 2018.” With AFP
