Stocks drop on worries of recession due to virus

PHILIPPINE SHARES declined yesterday on mounting worries of a recession due to the coronavirus disease 2019 (COVID -19) pandemic.

The benchmark Philippine Stock Exchange index (PSEi) lost 135.46 points or 2.57% to close at 5,131.16 on Monday. The broader all shares index also fell 75.19 points or 2.33% to 3,144.31.

“Local stocks fell sharply, giving back some of the strong gains experienced in the previous days to kickstart what seems to be another volatile week,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message yesterday.

He noted COVID-19 worries continue to drag the market lower, especially as cases continue to rise both locally and abroad.

Records by the Coronavirus Resource Center of John Hopkins

University show there were 723,700 confirmed COVID-19 cases across the world as of Monday afternoon. United States leads with more than 143,000 cases, followed by Italy with more than 97,600 and China with more than 82,100.

In the Philippines, the Health department reported 1,418 cases, 71 deaths and 42 recoveries from COVID-19 as of Sunday afternoon.

“The pandemic concerns compelled investors to take profits out of the market’s 10.21% week-on-week surge last week,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message.

He noted investors are reacting to the declaration of the International Monetary Fund that the global economy is now in recession, and the remarks of Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno that the Philippine economy could also suffer the same fate this year.

“The increase in cases is unabated. Its economic impact is worrisome… The latest developments are making the outlook dimmer and this is weighing on investors’ sentiment,” Mr. Tantiangco said.

All sectoral indices ended in red territory on Monday. Financials dropped 40.83 points or 3.35% to 1,176.45; holding firms lost 158.07 points or 3.07% to 4,984.04; industrials shaved off 132.91 points or 2.14% to 6,071.63; property trimmed 59.58 points or 2.14% to 2,721.57; mining and oil erased 54.92 points or 1.33% to 4,047.55; and services slipped 7.64 points or 0.64% to close Monday’s session at 1,169.63.

Some 535.84 million issues valued at P5.33 billion switched hands yesterday, down from Friday’s 696.58 million issues worth P7.95 billion.

Decliners outnumbered advancers, 134 against 49, with 37 names ending unchanged yesterday.

Net foreign selling grew to P887.40 million on Monday from the P23.35 million in net outflows recorded in the previous session.