Market retreats; BPI, SM Prime lead losers
The stock market tumbled Wednesday on profit-taking as investors closely track developments in the coronavirus crisis, while the oil market continued to fluctuate ahead of a crucial producers' meeting.
The Philippine Stock Exchange Index slumped 139.18 points, or 2.5 percent, to 5,510.83 on a value turnover of close to P6 billion. Losers beat gainers, 102 to 88, with 37 issues unchanged.
Bank of the Philippine Islands, the third-biggest lender in terms of assets, fell 6.5 percent to P57.05, while SM Prime Holdings Inc. of the Sy Group dropped 6.1 percent to P29.20.
Aboitiz Equity Ventures Inc. of the Aboitiz Group declined 5.9 percent to P41.95, while major property developer Ayala Land Inc. shed 4.5 percent to P32.
Most Asian equities, meanwhile, retreated Wednesday after a two-day rally.
While the deadly disease continues to sweep across the planet, signs that the rate of infections is possibly leveling out and countries are preparing to ease some lockdown restrictions have instilled a semblance of optimism this week.
However, the scale of the fight was laid bare by official data showing France's economy suffered its worst contraction during the first three months of this year since just after World War II.
The French central bank said that in the last two weeks of March, as the coronavirus crisis deepened, economic activity plunged 32 percent.
"Signs that the number of new daily coronavirus cases is topping out in Western Europe... is driving expectations that social distancing measures will be lifted soon," said Stephen Innes, at AxiCorp.
"Relaxing of social distancing rules is providing the undercurrent of positivity in the markets."
However, uncertainty about how long the crisis will last and the damage it will inflict on the global economy was keeping traders on edge and hobbling any sustainable rally.
Wall Street, where all three main indexes soared at least seven percent at the start of the week, struggled to extend its rally and turned into negative territory Tuesday.
The losses bled into Asia, with Hong Kong losing more than one percent, Singapore two percent, and Sydney and Seoul each 0.9 percent.
Shanghai ended down 0.2 percent, while Jakarta fell.
Tokyo, however, rose more than two percent as Japan's government unveiled details of a $1-trillion stimulus package, Mumbai added 0.8 percent and Taipei piled on 1.4 percent. Wellington also rose.
Jeffrey Halley, at OANDA, offered a warning for traders to beware any false dawn.
"A lot of good news has been built into asset markets this week on the most tenuous signs that the outbreak is peaking," he said in note. "Should that be proved premature the correction... could be very ugly indeed."
He said a bear market rally should not be mistaken for the beginning of a V-shaped recovery, adding: "The best we can hope for is a U, with a W in a close second place."
Oil prices rallied, but the commodity continues to swing as traders keenly await Thursday's planned meeting of the world's top producers, which will discuss a possible output cut.
The commodity has been battered by the virus as lockdowns around the world bring the global economy to a standstill and drag on demand, while a price war between Russia and Saudi Arabia has compounded the crisis. With AFP
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