Market drops; banks lead decline

Share prices declined for the third straight day Thursday on track with the rest of Asia as a sharp rise in fresh virus infections in the United States and elsewhere sparked a hard sell-off in equities, following hefty losses on Wall Street and in Europe.

The Philippine Stock Exchange Index fell 70.57 points, or 1.1 percent, to 6,118.26 on a value turnover of P6.7 billion. Losers beat gainers, 139 to 58, with 38 issues unchanged.

Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, infrastructure and hospitals, dropped 5.4 percent to P3.67, while Security Bank Corp., the sixth-biggest lender in terms of assets, shed 3.5 percent to P105.

BDO, the largest bank, lost 3 percent at P97.10, while Metropolitan Bank & Trust Co., the second-biggest lender, declined 3 percent to P36.85.

Concerns about a possible trade battle between Washington and Europe added to the downbeat mood on trading floors, with a warning from the International Monetary Fund over the global outlook also souring sentiment.

Sydney dived 2.3 percent, while Tokyo, Seoul, Singapore, Jakarta, Bangkok and Wellington were all down more than one percent  

Mumbai, however, edged up slightly, while Hong Kong and Shanghai were closed for holidays.

A three-month surge across world markets, supported by the easing of lockdown measures and a wall of government cash, is showing signs of stalling as the killer virus sees a resurgence and raises questions about the pace of reopening.

A key worry is the US, where dozens of states including Texas, Florida and Arizona have seen infections spike in recent days.

Some US officials who loosened restrictions on business, dining, public gatherings and tourism are now urging residents to again stay home.

Disneyland, near Los Angeles, delayed its planned July 17 reopening without announcing a new date for the world’s second-most visited theme park, while Apple and Nike have closed stores that had recently reopened.

The issue had become serious enough for New York, Connecticut and New Jersey to announce they will impose a 14-day quarantine on people arriving from areas with high infection rates.

Elsewhere, Australia’s military announced it would send 1,000 troops to Melbourne to help contain the country’s only significant outbreak over fears of a second wave.

And in Europe, around 640,000 people in two German districts were facing new containment measures after an outbreak at a slaughterhouse.

Experts warn that an early summer heatwave across Europe could lead to a surge in infections as people hit beaches and parks while ignoring social distancing measures.

“Clearly the market really got the shivers over the prospect of a big increase in COVID and maybe starting to see places that were opening up have to close up, pressing the economy and lowering the prospects for the stock market,” Margie Patel, at Wells Fargo Asset Management, told Bloomberg TV.

“We’ve had such a great run from the end of March it’s only inevitable that we should get at least a little step back on the way to higher prices over the course of the year.” With AFP

Topics: Philippine Stock Exchange Index , Wall Street , Metro Pacific Investments Corp , International Monetary Fund
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