Philippine Stocks Sink To A Seven-Year Low
The Philippine stocks have sunk to its 7 year low due to the fear of a global economic recession. This after the declaration of coronavirus pandemic and the persistent clash among oil supply producers.
The index plummeted to 6.23% or 395.91 points ending the morning trade at 5,957.35.
According to an online stock market platform Investagrams, PSEi is on course to slide to its lowest level since February 2014. Meanwhile, the broader all-share index shed 5.29% or 201.41 points to 3,607.32 at noon break.
Piper Chaucer Tan, the client engagement officer and research associate at Philstocks Financials Inc cited COVID-19 and oil price war as the main driver of the global markets crashing.
Global markets are also crashing amid COVID-19, followed by the oil price war. We see this as a health and economic downfall for the world.
Mining and oil subindices were bleeding on recess which dropped 9.05%, its followed by holdings firm (-6.93%), financials (-6.18%), property (-6.11%), industrial (-4.75%), and services (-4.49%).
Decliners trumped advancers, 203 to 24.
After the World Health Organization declared the COVID-19 a pandemic, traders were already turning to the global market, leaving Asian Markets in the red at the open.
At the foreign exchange, the Philippines peso also depreciated to ₱50.81 versus the USD. Despite the Philippine peso being more tempered, the anxiety over the virus also affected its performance.
In the Middle East, Saudi Arabia has begun producing more oil after the collapse of talks among oil-producing nations this week. What was supposed to be a meeting to cap an oil price decline due to low demand from China, became a price war between Saudi Arabia and other suppliers like Russia.
US President Donald Trump added to investors’ worry, after he imposed a 30-day travel ban between the US and Europe as a containment measure against the deadly virus, which has engulfed Italy to become among the areas outside China with the most number of infections.
Elsewhere in the region, the benchmark Nikkei in Tokyo was down 5.42% or 1,051.88 points to 18,364.18. Its broader Topix dropped 5.06% or 70.15 points to 1,314.97 after US President Donal Trump imposed a 30-day travel ban between the US and Europe to contain the virus. Australia’s ASX lost 5.4%, while Hong Kong markets tumbled three percent at the open.
On the brighter side, this news boosted the yen and it keeps on gaining as uncertainty continues. Currencies from emerging markets, however, are suffering.
According to a Global Chief Markets Strategist at AxiCorp, the Trump travel ban has filled the dealing rooms in Asia with sentiments to sell.
Travel restrictions equal slower global economic activity, so if you need any more coaxing to sell… after a massively negative signal from overnight trading in US markets, it just fell in your lap.
In the local market, Philstocks Tan forecasted that the PSEi is unlikely to recover from the downtrend anytime soon. He explained that the market moves in cycles and that eventually, things will normalize. He is wary that this may not be the time for the market to have a big bounce back.
Tan also added:
We may see some recovery but this will be for the short term. At least we are looking at 1H 2020 for the sentiments to subside if the virus has been contained during those time and oil supply issues have been resolved
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