Stock market falls for 4th straight day; banks drop

The stock market slumped for the fourth straight day Wednesday, with optimism over the global economy and concerns about the fast-spreading Delta variant fueling volatility.

The Philippine Stock Exchange sank 110.99 points, or 1.7 percent, to 6,476.21 on a value turnover of P5.9 billion. Losers overwhelmed gainers, 167 to 45, with 41 issues unchanged.

Banks led decliners after Fitch Ratings revised on Tuesday the outlook on the long-term issuer default rating of the country’s six biggest domestic banks to negative from stable following a similar downward revision in the outlook of the Philippines on July 12.

Metropolitan Bank & Trust Co. of the Ty Group, the second-biggest lender in terms of assets, fell 4.3 percent to P44.10, while BDO Unibank Inc., the largest bank, dropped 4.1 percent to P104.10.

JG Summit Holdings Inc. of the Gokongwei Group shed 4.6 percent to P58.20, while Jollibee Foods Corp., the biggest fast-food chain, declined 3.1 percent to P204.

The rest of the Asian equity markets struggled to maintain early gains Wednesday and were mixed in later trade despite a strong rebound in New York.

Investor confidence—built on months of vaccinations, and vast government and central bank support—has been knocked in recent weeks by surging infections around the world that have forced new lockdowns and containment measures while putting the global recovery at risk.

That has culminated in big losses for equity markets, which have been sitting at record or all-time highs, as dealers shifted into havens such as Treasuries, gold and the yen.

Blame has largely fallen on the highly transmissible Delta variant, which has spread like wildfire through countries, including those with high vaccination rates. But the main worry is for those that are struggling to inoculate their populations fast enough.

And the head of the World Health Organization warned Wednesday that the pandemic was “a test the world is failing.”

However, analysts said that while the near-term picture was bleak, sights were set on the recovery outlook and that market losses were to be expected.

“We had a dip, we had a shock, there is fear of the Delta variant and there is the other side—which is some day we get beyond COVID and when we do, we have a worldwide recovery,” David Kotok, of Cumberland  Advisors, told Bloomberg Television.

“We are seeing that tension going on in the markets for the last few days.”

All three main indexes on Wall Street closed up more than one percent Tuesday but Asia struggled to make as much progress. 

Tokyo, Shanghai, Sydney, Singapore, Wellington, Bangkok and Jakarta all rose but Hong Kong, Seoul and Taipei fell.

Oil prices retreated on demand fears stoked by the rising infection rates, while American Petroleum Institute data indicating a surprise increase in US inventories last week added to market malaise.

That has coupled with news this week that OPEC and other major producers had finally agreed to lift output to address warnings that there could be a supply crisis caused by the economic recovery and people returning to their daily lives. With AFP