Market plunges; Ayala Land falls

The stock market tumbled Thursday on profit taking and following overnight woes on Wall Street as more negative US economic data fueled worries about the full impact of the coronavirus pandemic.

The Philippine Stock Exchange Index plunged 420.45 points, or 7.1 percent, to 5, 525.60 on a value turnover of P9.3 billion. Losers overwhelmed gainers, 153 to 50, with 38 issues unchanged.

Major property developer Ayala Land Inc. sank 11.2 percent to P30.20, while International Container Terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., dropped 11 percent to P75.20.

Aboitiz Equity Ventures Inc. of the Aboitiz Group plummeted 14.9 percent to P41.25, while Megaworld Corp., the largest lessor of office spaces, fell 10 percent to P2.70.

The rest of Asian markets fell on Thursday after a spate of grim economic forecasts this week. The International Monetary Fund warned of the worst global downturn in a century, and poor US economic figures released Wednesday further spooked investors.

The woes on Wall Street discouraged traders in Asia, where Tokyo closed down 1.3 percent. Hong Kong fell 0.6 percent, Sydney lost 0.9 percent and Taipei shed 0.7 percent.

Seoul was flat, while Shanghai rose 0.3 percent and Singapore was up 0.7 percent.

The latest numbers from the United States, the world’s biggest economy, cast more light on the scale of the damage unleashed by lockdowns and social distancing measures imposed to try and stop the spread of the virus.

US retail sales plunged in March while industrial production in the same month suffered its steepest drop since 1946, data showed Wednesday.

Other reports pointed to weak homebuilder sentiment and manufacturing conditions, while a Federal Reserve report said American economic activity “contracted sharply.”

“The economic data was nothing short of disastrous,” Ann Miletti of Wells Fargo Asset Management told Bloomberg TV.

“How long can you sustain the shutdown is what’s on investors’ minds.”

President Donald Trump has said that he will on Thursday announce the first plans for lifting lockdowns in the US—the worst-hit country with the most virus deaths and infections.

The World Health Organization has warned, however, that lifting virus-related restrictions too early could have devastating consequences, with fears of a possible second wave of infections.

“Any recovery in risk sentiment depends on how quickly economies can reopen without risking overloading their healthcare systems and, most of all, not risking any chance of a secondary spread,” said Stephen Innes, chief global markets strategist at AxiCorp.

“The risk of escalating economic damage is putting… governments under immense pressure to relax social distancing measures sooner, rather than later.”

There was more bad news on oil markets, with the International Energy Agency warning that 2020 was likely to be “the worst year in the history” of the sector.

Oil has plummeted in recent weeks as coronavirus lockdowns depressed demand, and the crisis was made worse by a pricing war between top producers Saudi Arabia and Russia.

Riyadh, Moscow and other producers agreed to an output cut but investors are worried that the dramatic production curbs will not be enough to stabilize the crude market. With AFP