Stock market poised to fall further

Stock market analysts expect trading this week to continue a downward trend on worries the outbreak of Chinese coronavirus would slow economic growth.

BDO Unibank Inc chief investment strategist Jonathan Ravelas said the market could move toward the 7,000-point level after the coronavirus made a dent on investor confidence.

Analysts said sentiments over the short term period would mainly revolve around concenrs on the rapid spread of the virus as the World Health Organization last week declared the outbreak a global health emergency.

The Philippine Stock Exchange Index last week plunged 5.5 percent to 7,200.79, while the broader All Shares Index declined slumped 5.1 percent to close at 4,292.21. The Philippine government over the weekend confirmed the first death outside China from the coronavirus.

“As the number of infections, possible infections and death due to the 2019 novel Coronavirus (2019-nCov) mount, share prices continued (their) slide,” said Justino Calaycay, research head of Philstocks Financial Inc.

All major sub-indices ended in red, led by industrial which dropped 8.3 percent, holding firms which fell 6.1 percent, and financials which declined 4.7 percent.

The services index dropped 4.5 percent, while mining and oil and property dipped 3.8 percent and 3.1 percent, respectively.

The PSEi year-to-date is down 8.2 percent.

Foreign investors were net sellers for the week by P3 billion, while the average daily value traded stood at P5.4 billion from the previous week’s average of P6.6 billion.

Weekly top price gainers were Manila Water Co Inc., which rose 12.2 percent to P12.16, Union Bank of the Philippines, which climbed 6.2 percent to P63.50, and Ayala Land Inc., which added 0.5 percent to P41.60.

Weekly top price losers were MacroAsia Corp., which fell 25 percent to P9.12, Manila Electric Co., which tumbled 15.3 percent to P256, and Cebu Air Inc., which dipped 10.5 percent to P75.

Meanwhile, stocks struggled worldwide on Friday with most indices ending sharply lower amid mounting worries the coronavirus outbreak will dent global economic growth.

The Dow slid more than two percent losing more than 600 points in its worst session since August as the three largest US carriers halted all service to China.

Just after markets closed, US authorities declared a public health emergency, and starting Sunday will ban entry into the country of any foreign national who has traveled to China in the past two weeks, while quarantining Americans who have made the trip.

Major European markets slid more than one percent, including London, where equities were weakened by a stronger pound in the final session before Britain was due to leave the European Union.

Asian equity markets also were gripped by virus fears in a volatile end to the week, although Japan’s Nikkei finished higher.

“Unless a cure is found, this could push a fragile world economic recovery into reverse,” warned Douglas McWilliams, deputy chairman at British research group the Centre for Economics and Business Research (CEBR). With AFP