Market tumbles on world virus spike

Stocks slumped for the fourth straight day Friday, along with the rest of Asian markets, on renewed concerns over the threat from coronavirus variants to the global economic recovery.

The Philippine Stock Exchange Index tumbled 90.07 points, or 1.3 percent, to 6,834.92 on a value turnover of P8.4 billion. Losers overwhelmed gainers, 153 to 59, with 43 issues unchanged.

Jollibee Foods Corp., the biggest fast-food chain, dropped 3.4 percent to P203, while Metropolitan Bank & Trust Co., the second largest lender in terms of assets, fell 3 percent to P47.45.

International Container Terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., shed 2.7 percent to P160, while BDO Unibank Inc., the largest bank, declined 2.4 percent to P111.50.

Most  Asian markets were lower Friday on renewed fears over the threat to the global recovery.

Japan’s decision to ban fans from most Olympic events, with Tokyo hosting the pandemic-postponed Games under a virus state of emergency, has heightened fears over the spread of infections from new coronavirus strains.

“COVID-19 resurgences remain a key risk for the region, with Japan being the latest to go under a state of emergency to curb spreads ahead of the Tokyo Olympics,” IG Asia market strategist Jun Rong Yeap wrote in a note.

“This may suggest a slower recovery ahead with third-quarter GDP growth probably revised lower.”

Tokyo pared most of its losses to close down 0.6 percent after falling as much as 2.5 percent.

Sydney fell 0.9 percent while Seoul and Taipei were down more than one percent. Shanghai recovered its earlier losses to close virtually unchanged.

Hong Kong was a rare bright spot, climbing 0.9 percent on bargain hunting following the previous day’s rout which saw the benchmark index fall 2.9 percent on concerns over Beijing’s crackdown on tech titans.

All three major US indices ended solidly down Thursday, with the Dow shedding 0.8 percent. 

“The markets have been supported by expectations on economic growth before … but now investors question whether the economy will normalize given a new wave of COVID-19 because of new variants and stagnation of economic indications,” Okasan Online Securities said.

On the bond market, the yield on 10-year US Treasuries advanced to 1.33 percent, off Thursday’s four-month low of 1.25 percent, while the yield on 30-year Treasury bonds was at 1.96 percent.

“The slide in US 10-year yields this week appears to suggest that bond investors are becoming increasingly concerned about a sharp slowdown in global and US growth prospects, as well as diminishing inflation expectations,” said Michael Hewson, chief market analyst at CMC Markets UK. 

Oil prices rose in Asian trade after US government data showed a fall in crude inventory and surging demand in the peak summer driving season.

The Brent contract was hovering around $74.5 a barrel while WTI was at $73.4. With AFP