Stocks sink on fresh lockdown measures

The stock market plummeted Monday after President Rodrigo Duterte placed Metro Manila and the provinces of Cavite, Laguna, Rizal and Bulacan back under stricter lockdown measures for two weeks as confirmed infections in the country surged past 100,000.

The Philippine Stock Exchange Index sank 212.53 points, or 3.6 percent, to 5,715.92 on a value turnover of P6.6 billion. Losers overwhelmed gainers, 154 to 51, with 39 issues unchanged.

More than 27 million people in the Philippines—about a quarter of the population—will go back into lockdown today after overwhelmed health workers warned the country was losing the battle against the coronavirus.

Major property developer Ayala Land Inc. fell 6 percent to P31.30, while Jollibee Foods Corp., the biggest fast-food chain, dropped 5.9 percent to P127.

Bank of the Philippines Islands, the third-largest lender in terms of assets, declined 5.1 percent to P64.70, while SM Prime Holdings Inc. of the Sy Group shed 4.8 percent to P28.55.

The rest of Asian markets mostly fell Monday with sentiment depressed by a spike in coronavirus infections that has forced fresh lockdowns and sparked worries about the impact on the world economy.

A lack of substantial progress by US lawmakers on a new stimulus package is also frustrating traders, while China-US tensions continued as the White House considers measures against Chinese tech firms, citing national security.

With the disease showing no sign of easing globally–total cases topped 18 million Monday”•governments are moving to reimpose containment measures.

Australia's Victoria state imposed fresh, sweeping restrictions Sunday, including a curfew in Melbourne for the next six weeks, a ban on wedding gatherings, and an order that schools and universities go back online in the coming days.

Britain introduced new measures in several northern counties at the end of last week, while there are reports the government is considering fresh moves to avert another economically painful national lockdown, including sealing off London.

The new wave of infections has fanned fears that a nascent economic recovery will be knocked off track.

"COVID-19 either remains rampant or is making worrying localised comebacks across the world," said Jeffrey Halley at OANDA.

"Although not priced into financial markets yet, it remains the critical risk factor to global recovery. Particularly if key economies that had previously controlled COVID-19 are forced back into large scale lockdowns again."

Japan's Nikkei 225 rose more than two percent as investors picked up cheap stocks following a steep drop last week, while there was also some cheer in data showing the country's economy contracted less than first thought in January-March.

Shanghai put on 1.8 percent following a forecast-beating reading on factory activity from Caixin, days after a strong official report showed improvement in the manufacturing sector. Seoul edged up slightly.

Congress at loggerheads

However, Hong Kong shed more than one percent as the city continues to see more than 100 infections a day, forcing authorities to put ever-tighter measures in place, while Singapore, Mumbai and Taipei were each off more than one percent.

Jakarta was off almost three percent. There were also losses in Sydney, Bangkok and Wellington.

London was flat at the open, while Paris and Frankfurt edged higher.

Concerns about the outbreak and a weak dollar caused by a massive program of US monetary easing helped safe-haven gold to a new record Monday, topping out at $1,988.40 before easing back slightly.

But AxiCorp's Stephen Innes said: "It's Monday and risk usually starts lousy after investors weekend-soak in COVID-19 headlines then turn better, so we could see a bit of a recovery from here." With AFP