The stock market sank Monday on growing signs certain sectors of the Philippine economy are feeling the impact of the COVID-19 outbreak.
The Philippine Stock Exchange Index slumped 182.34 points, or 2.5 percent, to 7,187.44 on a value turnover of P4.6 billion. Losers overwhelmed gainers, 147 to 44, with 46 issues unchanged.
Ayala Land Inc. said over the weekend mall and hotel businesses suffered a 10-percent decline in the first six weeks of 2020 following the eruption of Taal Volcano and the outbreak of the disease in China.
Ayala Land dropped 2 percent to P41.40, while parent Ayala Corp. fell 4 percent to P720.
Metro Pacific Investments Corp., which is into toll roads, water and electricity generation, hospitals and infrastructure, shed 4.1 percent to P3.06, while Security Bank Corp., the sixth-largest lender in terms of assets, tumbled 5.4 percent to P161.
Seoul, meanwhile, led a sharp drop across Asian equity markets on Monday as South Korea announced a surge in COVID-19 infections, while oil plunged and safe-haven assets rallied on growing concerns about a possible pandemic.
With the outbreak showing little sign of easing, investors are increasingly concerned it could have a much longer-term impact on the world economy, which was already stuttering, with a number of companies warning about their bottom lines.
Traders had been broadly optimistic that the virus—which has killed nearly 2,600 and infected 80,000—was being contained outside China but a spurt of infections and deaths in other countries including South Korea, Italy and Iran has fanned fears of a wider outbreak.
“While the coronavirus is probably slowing in China, it is speeding up elsewhere,” said Charles Gillams at RJMG Asset Management.
On Monday, South Korea reported 161 more cases, taking its total to 763 and making it the world’s worst-hit country outside China, with seven people now dead.
President Moon Jae-in has raised the virus alert to the highest “red” level, in a bid to strengthen the government response to the spiraling outbreak.
News of the spread hammered the KOSPI, which sank almost four percent, with market heavyweight Samsung diving 4.1 percent. The won fell 0.9 percent and is sitting at a six-month low.
Hong Kong shed 1.6 percent, with Sydney, Bangkok and Manila each dropping more than two percent. Taipei, Jakarta, Singapore and Wellington were all off more than one percent. Mumbai eased 0.8 percent with eyes on Donald Trump’s visit to India.
Shanghai was off 0.3 percent, with losses tempered by a series of economy-boosting measures including support for businesses and other stimulus measures.
The losses tracked a selloff on Wall Street, where the S&P 500 and Nasdaq each gave up more than one percent, while US 30-year Treasury yields hit an all-time high, indicating a rush into the safe havens.
Reports of the spread of the virus “raised concerns that we could be starting to see the beginnings of a global pandemic, with authorities seemingly at a loss to explain how or why the virus is spreading, particularly in Europe,” said Michael Hewson at CMC Markets UK. With AFP