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Market plunges to 15-month low

The stock market plummeted Wednesday along with the rest of Asia, with the coronavirus spreading rapidly around the world and health chiefs warning that governments were not prepared for the outbreak.

The Philippine Stock Exchange Index sank 277.60 points, or 3.9 percent, to a 15-month low of 6,909.84 on a value turnover of P10.06 billion. The index has lost 905.42 points, or 11.6 percent, since the start of the year.

Losers overwhelmed gainers, 184 to 27, with 30 issues unchanged.

International Container Terminal services Inc., the biggest port operator, slumped 11.3 percent to P102, while Aboitiz Power Corp. of the Aboitiz Group tumbled 8.2 percent to P29.10.

Major property developer Ayala Land Inc. fell 6.6 percent to P38.65, while JG Summit Holdings Inc. of the Gokongwei Group shed 6.1 percent to P69.

The rest of Asian markets sank. The heavy selling, after a day of relative calm caused by bargain-buying, followed another rout on Wall Street where all three main indexes lost around three percent after officials said COVID-19 would likely take hold in the United States.

With cases being reported in new countries—and lockdowns in nations including Austria, Italy and Spain—traders are growing increasingly fearful about the impact on the global economy.

The death toll is now at more than 2,700 while those infected are approaching 80,000, although new cases in China, the epicenter, are falling.

At the World Health Organization headquarters in Geneva, Bruce Aylward, who headed an international expert mission to China, hailed the drastic quarantine and containment measures taken by the country.

But he told reporters that other nations were “simply not ready” for reining in the outbreak, adding: “You have to be ready to manage this at a larger scale... and it has to be done fast.”

The WHO said countries must “prepare for a potential pandemic”—a term used to describe an epidemic that spreads throughout the world.

Tokyo and Shanghai each ended down 0.8 percent, having shed more than three percent Tuesday, while Hong Kong lost 0.8 percent in the afternoon.

Sydney, Seoul, Singapore, Wellington and Jakarta were all down more than one percent. Taipei and Bangkok were also well down.

“It’s the concern of the unknown,” David Kudla, at Mainstay Capital Management LLC, told Bloomberg TV. “The question is, is the selling getting a bit overdone or is it a more appropriate response to how far coronavirus has spread, and that eventual impact to the economy.”

With panicking investors rushing into safe havens, the yield on 30-year US Treasury bills are sitting at record lows, while the Japanese yen climbed and the dollar advanced against high-yielding currencies.

However, the dollar was being kept in check by speculation the Federal Reserve could cut interest rates to support markets, though for now officials are saying the US economy remains in rude health.

Oil prices edged up after three days of steep losses that have wiped about seven percent off both main contracts, although observers warn the virus’s spread to the giant US economy could deal it further pain. With AFP

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