Market sinks; BPI, JG Summit drop

The stock market tumbled Monday on profit-taking along with the rest of Asia, on fears of a second wave of virus infections around the world that could put the brakes on the easing of lockdowns and a budding economic recovery.

The Philippine Stock Exchange Index plummeted 312.42 points, or 4.8 percent, to 6,163.82 on a value turnover of P7.8 billion. Losers overwhelmed gainers, 178 to 39, with 29 issues unchanged.

Bank of the Philippine Islands, the third-biggest lender in terms of assets, fell 7.4 percent to P68.10, while conglomerate JG Summit Holdings Inc.of the Gokongwei Group dropped 6.2 percent to P61.

BDO Unibank Inc., the largest bank, declined 5.7 percent to P99, while GT Capital Holdings Inc. of the Ty Group also shed 5.7 percent to P462.

The rest of Asian equities also sank Monday While European nations press ahead with their reopening after months of strict shutdowns, there are signs that the deadly disease is coming back in China and seeing a resurgence in the United States too.

The worrying figures will provide a test for stock markets, which have soared up to 50 percent from their March troughs thanks to the lifting of stay-at-home orders and trillions of dollars of stimulus and central bank backstopping.

Beijing has carried out mass testing and locked down several neighborhoods after 79 cases were linked to a single wholesale food market in the capital. City official Li Junjie said Monday that cases had also been found at another market.

The city has raced to quash the new outbreak, closing the affected markets, deploying paramilitary police and putting nearby housing estates under lockdown.

That came as more than a dozen US states, including populous Texas and Florida, reported their highest-ever daily case totals, while Rome and Tokyo have also seen fresh spikes.

“It means the virus hasn’t lost its infectiousness, it isn’t weakening… we shouldn’t let down our guard,” World Health Organization deputy director Ranieri Guerra told Italian journalists.

AxiCorp’s Stephen Innes said in a note: “Falling infection rates have provided investors the confidence that the lockdown approach was working, allowing equity investors to look forward to 2021 as impressive monetary and fiscal policy provide a post-pandemic bridge.”

“However, rising new daily COVID-19 cases in two of the three most populous states in the US will test that resolve.”

Tokyo tumbled 3.5 percent and Seoul sank 4.8 percent, while Hong Kong, Sydney, Singapore, Mumbai, and Bangkok were all down more than two percent.

Shanghai was off one percent as data showed Chinese industrial output continued to improve slowly in May but crucial retail sales slipped on-year again, suggesting consumers were still nervous about going to the shops. 

Taipei and Jakarta each slipped 1.1 percent, with Wellington off 0.4 percent.

Still, there is hope for the recovery in Europe, with Germany, Belgium, France and Greece opening their borders to EU countries from Monday. Austria will follow on Tuesday, while Spain said it will do so on June 21.

Meanwhile, France from Monday will allow cafes and restaurants to open in full, instead of just their terraces. With AFP