Stock market falls to lowest level in nearly three months

Stocks tumbled Friday on rising virus infections worldwide and weak consumer spending that has been hampering economic recovery due to lockdown restrictions.

The Philippine Stock Exchange Index plummeted 239.22 points, or 3.5 percent, to a near three-month low 6,612.62. Value turnover reached just P3.6 billion, with losers beating gainers, 133 to 91, with 44 issues unchanged. The benchmark index closed at its lowest level since November 4, 2020, when it ended at 6,464.05.

JG Summit Holdings Inc. of the Gokongwei Group sank 8.2 percent to P60.80, while unit Universal Robina Corp., the largest maker of snack foods, fell 5.4 percent to P135.

Manila Electric Co., the biggest retailer of electricity, slumped 6.8 percent to P261, while Aboitiz Power Corp. of the Aboitiz Group dropped 6.8 percent to P24. SM Prime Holdings Inc. of the Sy Group declined 4.1 percent to P35.30.

The rest of Asian and European markets also suffered more losses Friday, capping a painful week for global equities that has been characterized by fears over surging infections and stuttering vaccine rollouts.

Traders have been licking their wounds after the worst global rout since October, following a months-long rally that has seen several indexes strike record or multi-year highs.

But observers remain confident for the long-term prospects of prices as the planet emerges from lockdowns and more people get inoculations.

Wall Street and most of Europe provided a positive lead, helped by some much-needed good news that fewer Americans than expected made claims for jobless benefits last week.

And data showing the US economy suffered its worst year since 1946—while growth tapered in the fourth quarter—also gave support to calls for lawmakers to pass Joe Biden’s huge stimulus proposals.

Tokyo shed close to two percent, while Seoul plunged more than three percent and Jakarta more than two percent, with Taipei off 1.8 percent.

Hong Kong, Shanghai, Sydney, Singapore and Bangkok also suffered sizeable falls. Mumbai and Wellington both rose.

Several issues have combined to push markets down, including concerns that valuations had gone too far as well as the frightening spike in virus cases and new variants, along with stuttering vaccination campaigns around the world.

Markets have also been rattled by a David-and-Goliath battle between a growing number of chatroom-inspired retail traders and Wall Street investors centered on struggling video game retailer GameStop, which has seen a number of professional dealers lose billions of dollars.

“The mood has become quite gloomy on vaccinations, which may not be surprising given we are in the pandemic’s darkest time so far,” said Axi strategist Stephen Innes. “But I think it’s important not to lose sight of what matters from a medical perspective: the vaccines work.” 

He added: “The big picture does not change in terms of markets’ outlook. Namely, an unprecedented amount of monetary and fiscal stimulus, a structural shift towards much more spending, a potentially unmatched economic rebound—whether starting in the second or third quarter—and a reasonable chance of inflation for the first time in several decades.” With AFP