The stock market slumped Tuesday after US crude prices crashed below $0.00 for the first time owing to crippled demand and a storage glut.
Other Asian equity markets were deep in the red, having enjoyed a healthy couple of weeks thanks to massive stimulus measures and signs of an easing in the rate of new infections globally.
The Philippine Stock Exchange Index plummeted 141.40 points, or 2.5 percent, to 5,592.25 on a value turnover of P5.7 billion. Losers overwhelmed gainers, 140 to 49, with 44 issues unchanged.
Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, sank 5.8 percent to P38.95, while JG Summit Holdings Inc. of the Gokongwei Group tumbled 6.2 percent to P50.
Conglomerate Ayala Corp. fell 5.1 percent to P575, while Jollibee Foods Corp., the biggest fast-food chain, dropped 4.8 percent to P136.10.
Tokyo, meanwhile, ended two percent lower, while Hong Kong shed 1.9 percent and Sydney dropped 2.5 percent with Mumbai more than three percent lower.
Shanghai sank 0.9 percent while Seoul was down a similar amount and Taipei retreated 2.8 percent. Singapore, Jakarta and Bangkok lost more than one percent, and there were also big losses in Wellington.
Investors were also tracking developments in North Korea following US reports that Kim Jong Un had undergone cardiovascular surgery earlier this month and was in “grave danger.”
The losses came despite signs that the virus, which has infected almost 2.5 million people and killed 170,000, is easing as global lockdowns begin to take effect, allowing some countries to slowly return to normality.
Analysts warned the drop in stocks could be an indication that the recent surge may have been too much too quick and another sell-off is possible.
The flight to safety was reflected in currency markets, where the dollar soared against high-yielding, riskier units. The Australian and New Zealand dollars and Russian ruble were all down more than one percent, while the Indonesian rupiah sank 0.9 percent.
The South Korean won came under extra pressure following the reports about Kim. CNN cited a US official saying Washington was “monitoring intelligence” that the leader was in “grave danger after a surgery”. The report did not specify what the intelligence was.
“If the North Korean news proves to be correct, the region is set for a period of uncertainty,” said OANDA’s Jeffrey Halley.
“Kim Jong-un was its leader for life, and he had weeded out a goodly number of potential rivals already. That leaves a nuclear-armed North Korea with giant armed forces facing a potentially messy succession process. China will also want to have its input into the process, forcefully if necessary.
US crude prices bounced back into positive territory Tuesday, a day after crashing below $0.00 for the first time.
West Texas Intermediate for May delivery rose to $1.10 a barrel after diving to an unprecedented low of -$37.63 in New York as the pandemic brings the global economy, transport and factory activity to a halt. However, it later eased back to sit 30 cents higher.
The sell-off in May futures came because the contract expires later Tuesday, meaning traders needed to find buyers to take physical possession of the oil—a job made near-impossible as storage becomes scarce. With AFP