Market retreats; ICTSI, ISM drop

The stock market fell Wednesday, ignoring another positive lead from Wall Street with investor sentiment mixed about the immediate and long-term impact of the coronavirus outbreak.

The Philippine Stock Exchange Index declined 56.30 points, or 0.8 percent, to 7,383.10 on a value turnover of P6.1 billion. Losers overwhelmed gainers, 122 to 63, with 51 issues unchanged.

International Container Terminal Services Inc., the biggest port operator, shed 3.5 percent to P121.60, while Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, dropped 3.2 percent to P3.05.

ISM Communications Corp. sank 11.2 percent to P1.98, while Megaworld Corp., the largest lessor of office spaces, fell 2 percent to P3.92.

The rest of markets in Asia-Pacific rose, with investors monitoring the latest developments in the coronavirus outbreak.

The virus, officially named COVID-19 on Tuesday, has spooked markets around the world, having killed more than 1,100 people and infected tens of thousands since it emerged in central China at the end of last year.

Tokyo’s benchmark Nikkei 225 index closed 0.7 percent higher, while Shanghai ended the day up 0.9 percent.

In afternoon trade elsewhere, Hong Kong put on 1.0 percent, Sydney gained 0.5 percent and Singapore rose 1.2 percent.

Seoul, Taipei, and Wellington were also higher.

The positive morning following fresh record closes by the S&P 500 and the Nasdaq in New York on Tuesday.

“Despite the doom and gloom being shown in the real economy, Asian equity markets are a sea of green today. COVID-19 fears have been shrugged off, with regional markets preferring to follow Wall Street’s lead,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.

“Unfortunately, seas of green are often associated with algal blooms, which tend to suffocate all life in the water within them. The rallies of the past two days should be approached with caution.”

Traders reacted positively to cautious comments from the US Federal Reserve Chairman Jerome Powell on the new coronavirus—which has spread to more than two dozen countries and has been declared a global health emergency.

The Fed boss told Congress members on Tuesday that the central bank was closely monitoring the virus and that its impact could spill over to the world economy, but the assessment was not as gloomy as many had expected.

China, the world’s second-largest economy, is looking to recover momentum after authorities extended the Lunar New Year break in a bid to stop the spread of the virus.  

But millions of people remain in lockdown in many cities, where transport has also been severely restricted—disrupting supply chains for key industries, including smartphones and cars.

There are expectations that Beijing will introduce major stimulus policies to offset the hit to the economy.

There are concerns about how that will impact not only China’s overall economic growth, but also the bottom lines of many multinational firms.

The production lines of major auto makers such as GM and Hyundai have already been disturbed, and there is fear that airlines and the hospitality and tourism sectors will also take a hit. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , ICTSI , ISM
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