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Friday, March 29, 2024

Stock market declines; BDO and Jollibee drop

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Stocks sank Tuesday on further consolidation even as investors remain fixated on the fast-spreading Omicron coronavirus variant.

The Philippine Stock Exchange Index dropped 70.55 points, or 1 percent, to 7,167.06 on a value turnover of P6.9 billion. Losers beat gainers, 106 to 75, with 56 issues unchanged.

BDO Unibank Inc., the biggest lender in terms of assets, declined 2.7 percent to P123.60, while Bank of the Philippine Islands, the fourth-largest bank, fell 2.6 percent to P92.10.

Jollibee Foods Corp., the biggest fast-food chain, decreased 2.4 percent to P208.80, but Solar Philippines Nueva Ecija Corp.,  the developer of what is planned to be the largest solar project in Southeast Asia,  rose 3.6 percent to P1.15.

The rest of Asian equities stabilized and oil prices saw a much-needed gain Tuesday after their latest flop as bargain-buyers moved in.

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Reports that moderate Democratic Senator Joe Manchin could still be willing to discuss US President Joe Biden’s $1.75-trillion social spending bill—having delivered a blow to the White House Sunday by rejecting it—also provided a little support, with talks likely to drag.

Markets have been lashed since the emergence of Omicron as it spreads quickly through populations, forcing governments to impose anti-virus measures that are economically damaging.

The Netherlands has imposed a lockdown over the holiday period, Germany has tightened restrictions notably affecting the unvaccinated, and media speculation has swirled over possible tougher UK curbs.

“There is more uncertainty than I think most people thought we would see here as they were anticipating a Santa Claus rally,” said Victoria Fernandez of Crossmark Global Investments on Bloomberg Television.

“Volatility and uncertainty are the key terms that will lead us into the new year.”

And National Australia Bank’s Ray Attrill added: “For now… it’s the short term economic impact of the virus spread and related restrictions that (are) front and centre of market focus.”

All three main indexes on Wall Street ended down more than one percent, though they pared early losses.

Asia and Europe were on the front foot Tuesday.

Tokyo added more than two percent, while Hong Kong jumped one percent. There were also healthy gains in Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington, Mumbai, Jakarta and Bangkok.

Crude rose too, with both main contracts rallying after being hammered in recent days by concerns that new Omicron measures will erase demand, with travel curbs already in place in several countries and many people choosing to stay home.

While the gains are welcomed, OANDA’s Jeffrey Halley warned: “Sentiment remains exceedingly fragile, complicated by rapidly thinning liquidity in asset classes ahead of the holiday season and year-end.

“We are one headline away, be it Omicron or something else, from normal service resuming. December is about V for Volatility and not directional market trends.” With AFP

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