The stock market extended its slump Wednesday, weighed down by prospects of a prolonged economic recovery after President Duterte rejected the easing of age restrictions in areas under a modified general community quarantine in a bid to help revive the retail industry.
The Philippine Stock Exchange Index tumbled 113.55 points, or 1.6 percent, to 6,863.61 on a value turnover of P10.7 billion. Gainers, however, edged losers, 112 to 101, with 50 issues unchanged.
Universal Robina Corp., the biggest maker of snack foods, sank 5.3 percent to P143, while major property developer Ayala Land Inc. fell 3 percent to P38.80.
BDO Unibank Inc., the largest lender in terms of assets, dropped 3.2 percent to P104.50, while sister unit SM Prime Holdings Inc. of the Sy Group fell 2.4 percent to P36.80.
The rest of Equity investors in Asia, meanwhile, trod warily Wednesday as they weighed hopes for a long-term recovery against immediate worries over surging virus infections and mutations—and slow vaccine rollouts.
Wall Street’s three main indexes ended in the red and Asia struggled to rebound from Tuesday’s sell-off.
Hong Kong fell again after being battered Tuesday by the Chinese central bank’s decision to drain billions of dollars out of the financial system as it looked to prevent an asset bubble developing.
Sydney, Seoul, Mumbai, Bangkok and Jakarta also fell but Tokyo, Singapore, Shanghai, Taipei and Wellington rose.
Signs that US President Joe Biden’s much-vaunted stimulus could face a tough ride through Congress also tempered optimism, while there was increasing talk of a market correction following a recent global rally.
With new, more transmissible versions of the coronavirus spreading rapidly through populations, governments are being forced to impose strict containment measures, and their efforts to administer jabs are hampered by distribution problems.
Biden said Tuesday that getting people vaccinated was “a war-time undertaking” but added that an additional 200 million doses had been ordered and that authorities would have enough for virtually the entire population by autumn.
Still, there is concern that the drugs will be less effective against new strains of the virus—though manufacturers have moved to reassure the public that they will not be.
Observers said that while the outlook was positive—the International Monetary Fund has lifted its 2021 global growth forecasts—the first few months of the year could be painful.
“Markets may continue to struggle for near term direction as COVID concerns continue to cast a pall over the proceedings, creating an unpleasant situation for both risk and healthcare concerns,” said Axi strategist Stephen Innes.
“With the virus spreading like wildfire in parts of the world, it is now possible that the first quarter will be a lost quarter and part of the second quarter also.”
He said worries about the virus mutations “will continue to linger over markets like a dark cloud until vaccine distributions get ironed out and a definitive drop in contagion levels can thoroughly support the vaccine efficacy results.” With AFP