Market declines on profit taking

Stocks fell Friday on profit taking as a spike in new virus cases outside China spooked Asian markets after Wall Street pulled back from record highs as more companies warned earnings could be hurt by the epidemic.

The Philippine Stock Exchange Index dropped 43.22 points, or 0.6 percent, to 7,369.78 on a value turnover of P5.2 billion. Losers beat gainers, 104 to 76, with 51 issues unchanged.

Megaworld Corp., the biggest lessor of office spaces, slumped 6.2 percent to P3.80, while parent Alliance Global Group Inc. declined 2.3 percent to P10.26.

International Container Terminal Services Inc., the largest port operator, sank 5.9 percent to P118, while ISM Communications Corp. tumbled 7.7 percent to P1.68.

More than 2,200 people have died from the novel coronavirus, which has infected over 75,000 people, mostly in China, and spread panic around the world.

While Beijing claims its epidemic control efforts are working, the rising death toll and number of new infections abroad have rattled investors.

A batch of warnings from companies over the impact of the virus on bottom lines—including Danish ship operator Maersk and Air France-KLM—and weaker manufacturing data in Japan also fanned anxiety.

Initial hopes that the virus would have only a short-term impact on earnings and economic growth have given way to the reluctant realization that it could linger.  

“It took Apple to do what the coronavirus couldn’t—make stocks feel a little queasy,” said Stephen Innes of AxiCorp, referring to the tech giant’s warning Monday that it would miss its quarterly revenue forecast because of the disease.  

“The market seemed to absorb the initial Apple shock in its typically pleasant manner, but it’s the aftershocks when corporate America starts waving the warning flags in tandem that could prove to be the biggest gut check.”

Seoul’s Kospi index fell 1.5 percent after the country confirmed 52 more virus cases, taking its total to 156—the second-highest national toll outside China.   

Japan’s benchmark Nikkei 225 index closed down 0.4 percent as investors took to the sidelines ahead a long weekend.

Mainland China’s key Shanghai Composite Index was up 0.1 percent following central bank efforts to cushion the impact of the virus on the world’s second-largest economy, where manufacturing activity has been hit hard.

Elsewhere, Sydney and Taipei both shed 0.3 percent while Singapore was off 0.1 percent.  

China reported Thursday a big drop in the number of new infections after it once again changed the method of counting patients with the virus.

It was the second revision of criteria in just eight days and the flip-flopping “did not help the mood” of investors, noted Rodrigo Catril of National Australia Bank.

The National Health Commission reported 889 new cases on Friday, up from the previous day.  

After the losses on Wall Street and in Europe, Jeffrey Halley of OANDA likened the reaction on Asian markets to “more a case of the sniffles, rather than a full-blown cold.” With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi
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