Market tumbles; SM Prime, Jollibee slump

Stocks plummeted Wednesday as the market resumed session after a holiday and played catch-up with the steep losses of the global markets the other day.

The Philippine Stock Exchange Index sank 253.82 points, or 3.5 percent, on a value turnover of P14.4 billion. Losers overwhelmed gainers, 165 to 40, with 42 issues unchanged.

SM Prime Holdings Inc. of the Sy Group slumped 6.4 percent to P35, while Jollibee Foods Corp., the biggest fast-food chain, dropped 5.9 percent to P221.20.

BDO Unibank Inc., the largest lender in terms of assets, fell 4.8 percent to P118, while Globe Telecom Inc., the second-biggest mobile phone firm, declined 4.4 percent to P3,136.

The rest of the Asian markets mostly rose Wednesday while oil prices bounced as traders assessed the global economic outlook after top drug makers offered differing opinions on their vaccines’ efficacy against Omicron and the Fed took a hawkish pivot on monetary policy.

A mild recovery from the previous two days’ steep losses was turned on its head in the region on Tuesday after Moderna head Stephane Bancel told the Financial Times that existing vaccines might not be as effective against the new coronavirus strain, owing to its multitude of mutations.

But other drugmakers later said it was far too early to make a judgement. The boss of BioNTech, which made a shot with Pfizer, said it was likely people would be protected against severe symptoms.

The less alarming outlook from other firms helped settle nerves slightly while news that Moderna, Pfizer and the backers of Russian vaccine Sputnik V are already working on an Omicron-specific vaccine also provided some solace.

With medical experts saying Omicron was still being assessed, analysts said markets would remain volatile.

“If by this time next week the medical gurus have concluded that existing vaccines are ‘sufficient’ and/or the Omicron virulence is milder than the current Delta variant, the market should bounce strongly,” said strategist Louis Navellier.  

“Conclusions the other way could weigh heavily on the current bullish outlook for 2022,” he added.

“Such uncertainty will likely push  some people to the sidelines who want to lock in the strong gains they’ve already booked for 2021.”

Tokyo and Hong Kong, which both went south soon after the Bancel comments were released, saw much-needed gains.

Shanghai, Singapore, Seoul, Wellington, Mumbai, Bangkok and Taipei also rose, and investors took heart from data showing factory activity across the region expanding last month.

Sydney, which closed before the interview was published Tuesday, slipped slightly—though losses were pared by data showing Australia’s economy shrank less than feared in the third quarter.  Jakarta sank.

Crude—which was pummeled Friday and again Tuesday on fears about possible new lockdowns and their impact on demand—also enjoyed some advances with both main contracts up around four percent.

The broadly positive performance across Asia  came after US Federal Reserve boss Jerome Powell put the central bank on the path to removing its vast financial support measures at a quicker pace than first flagged, and lifting interest rates next year. With AFP