The stock market slipped Thursday after the release of official data showing the economy shrank a record 9.5 percent last year, as coronavirus measures devastated the retail and tourism sectors while a series of natural disasters wrecked crops.
The Philippine Stock Exchange Index shed 11.77 points, or 0.2 percent, to 6,851.84 on a value turnover of P8.8 billion. Losers overwhelmed gainers, 136 to 73, with 53 issues unchanged.
Data showed the fourth-quarter gross domestic product decline improved from the revised 11.4-percent contraction in the third quarter. It was, however, a reversal of the 6.7-percent expansion recorded in the fourth quarter of 2019. GDP grew 6 percent in the whole of 2019.
Acting Socioeconomic Planning Secretary Karl Kendrick Chua said despite the contraction in the gross domestic product, the outlook for this year was “encouraging” as measures introduced to contain the virus are eased further and the country prepares for a vaccination drive.
PLDT Inc., the biggest telecommunications firm, fell 2.5 percent to P1,370, while International Container Terminal Services Inc., the largest port operator and owned by tycoon Enrique Razon Jr., declined 1.6 percent to P122.
Magnetite iron miner Apollo Global Capital Inc. slumped 19.8 percent to P0.199, while Basic Energy Corp. sank 9.9 percent to P1.
The rest of Asian markets suffered further losses Thursday, tracking a rout in New York and Europe as markets were hit by a perfect storm of worries about the slow rollout of vaccines, surging infections, a stuttering economic recovery and high valuations.
After a months-long rally sent several indexes to records or all-time highs, investors have started to fret in recent weeks about a possible correction and analysts say some losses are to be expected.
All three main Wall Street markets ended more than two percent lower. Asia was also a sea of red.
Hong Kong lost more than two percent, along with Jakarta and Wellington, while Shanghai and Sydney were almost two percent off.
Tokyo, Seoul, Mumbai, Singapore, Taipei and Bangkok lost more than one percent.
The Federal Reserve added to the sense of concern as it warned that the economy was struggling in the face of a new wave of COVID-19 infections that is hammering the northern hemisphere and forcing governments to reimpose strict containment measures.
The US central bank said the “pace of the recovery in economic activity and employment has moderated in recent months” and said it would maintain its ultra-loose monetary policy for the foreseeable future.
Chair Jerome Powell added that “overall economic activity remains below its level before the pandemic, and the path ahead remains highly uncertain.”
While there were few surprises from the meeting and Powell’s comments, they provided a dose of reality to investors about the state of the economy, despite broad long-term optimism.
Worries about inoculations are rife, with the US and Europe struggling to get their programs into gear owing to supply problems. With AFP
