The stock market sank Friday along with the rest of Asia over fears of a new coronavirus variant that scientists warn could be more infectious than Delta and more resistant to vaccines, potentially dealing a heavy blow to the global recovery.
The Philippine Stock Exchange Index slumped 90.83 points, or 1.2 percent, to 7,278.44 on a value turnover of almost P10 billion. Losers beat gainers, 135 to 66, with 43 issues unchanged.
Megaworld Corp., the biggest lessor of office spaces, fell 4.8 percent to P3.14, while GT Capital Holdings Inc. of the Ty Group dropped 4.5 percent to P575.
PLDT Inc., the biggest telecommunications firm, declined 2.6 percent to P1,699, while Globe Telecom Inc., the second-largest, decreased 2.9 percent to P3,400.
The rest Asian and European markets slumped and oil prices plunged while safe havens rallied on Friday.
The B.1.1.529 strain has been blamed for a surge in fresh cases in South Africa and has already cropped up in Hong Kong, with the World Health Organization due to hold a meeting later in the day to decide if it should be designated a variant of “interest” or of “concern.”
The discovery of the South African variant has led Britain, Germany, Italy, Singapore and Israel to ban all travel from the country and five others in southern Africa, as officials look to prevent it from taking hold in populations and spreading quickly. The European Union said it was looking into a blanket ban across the bloc.
“Early analysis shows that this variant has a large number of mutations that require and will undergo further study,” the WHO said.
The news has hammered confidence in Asian markets, which were already under pressure as traders prepared for the Federal Reserve to start tightening its monetary policy to fend off surging inflation.
On equity markets, Tokyo, Hong Kong and Mumbai were more than two percent off, while Sydney, Seoul, Singapore, Bangkok, Taipei, Mumbai, Wellington and Jakarta shed more than one percent. Shanghai saw more limited losses.
Firms linked to travel were among the worst affected as investors fretted over the possibility that more restrictions will be brought in by governments.
Sydney-listed Qantas lost more than five percent, Hong Kong’s Cathay Pacific shed 4.1 percent and Singapore Airlines more than three percent. Macau casino operators were also down in Hong Kong.
Oil prices were also sharply lower—with Brent and WTI more than four percent lower—on concerns about the impact on demand if new containment measures were to be introduced.
The selling comes as OPEC and other key producers prepare to meet next week to discuss output plans, with analysts saying officials will be keeping a close eye on developments as it could force them to re-evaluate their agreement to slowly release more of the black gold.
“The one bull in the china shop that could truly derail the global recovery has always been a new strain of COVID-19 that swept the world” and caused the reimposition of restrictions, said OANDA’s Jeffrey Halley.
The flare-up of uncertainty also sent safe-haven currencies up, with the yen—a go-to unit in times of turmoil—piling ahead against the dollar. With AFP