Extended quarantine sinks stocks

Stocks sank Friday after President Rodrigo Duterte extended the enhanced community quarantine in Metro Manila and other parts of Luzon and the Philippines to May 15.

The Philippine Stock Exchange Index slumped 134.57 points, or 2.4 percent, to 5,464.98 on a value turnover of P5.2 billion. Losers beat gainers, 105 to 76, with 48 issues unchanged.

SM Prime Holdings Inc., an integrated property developer and owned by the Sy Group, fell 5.3 percent to P28.65, while Aboitiz Equity Ventures Inc. of the Aboitiz Group dropped 6.6 percent to P40.65.

Major property developer Ayala Land Inc. declined 4.3 percent to P28.90, but PLDT Inc., the biggest telecommunications firm climbed 5.5 percent to P1,227.

Meanwhile, US oil prices were set to end a historically bad week on a positive note, extending gains Friday owing to rising Iran-US tensions, though equities edged down following a series of crushing economic data.

As the rates of infection and deaths linked to the coronavirus show signs of easing in some countries thanks to draconian lockdowns, a fuller picture of the extent of its economic impact was beginning to emerge.

Purchasing managers indexes—which gauge activity in countries’ factory and service sectors—came in at either lows not seen in decades or in history, highlighting the huge battle governments face in averting an extensive, painful depression.

The readings came as the US said 4.4 million people applied for unemployment benefits last week, taking the total virus-fueled job losses in the country to more than 26 million.

Tokyo stocks ended 0.9 percent lower, while Hong Kong shed 0.4 percent and Singapore slipped 0.9 percent.

Shanghai, Seoul and Jakarta fell more than one percent, while Mumbai dropped 0.5 percent. Taipei and Bangkok fell 0.2 percent apiece, and Wellington was off 0.3 percent.

There was little major reaction to news that US lawmakers had approved nearly half a billion dollars in new stimulus, on top of the more than $2.2 trillion already passed.

Adding to the downbeat mood was a Financial Times report that said initial trials of the remdesivir coronavirus drug being developed by Gilead Sciences had flopped.

The news was a blow to investors and while Gilead said it was still awaiting data from multiple studies of the drug, which has shown promise in some analyses, it sparked a sell-off on Wall Street with all three indexes ending virtually flat.

That weakness seeped into Asia, which was on course for a weekly loss, having enjoyed two weeks of healthy gains caused by huge stimulus measures and hopes the disease was plateauing.

“Beyond extraordinary policy support, the main reason for the strong recovery in risk sentiment is the unambiguous clarity of this recession’s driver compared to previous downturns that were more multi-branched and ostensibly more difficult to unwind,” said AxiCorp’s Stephen Innes.

“The removal of a single recessionary input (the virus) via a vaccine or more effective treatment can pave the way for fast recovery in output. There’s a lot of hope riding on a cure, and with optimism around remdesivir as top view on the healthcare section, it’s a bit of blow for the market at week’s end.” With AFP