Stocks plummet by record 24%, end at 8-yr low

MANILA, Philippines — The stock market collapsed yesterday in a dizzying crash, with the index hitting an eight-year low and wiping out P1.16 trillion in market value, after a two-day controversial shutdown.

The benchmark Philippine Stock Exchange index (PSEi), the stock market gauge, nosedived to the 4,000 level, finishing 711.95 points lower at 4,623.42, but not before shedding 24 percent earlier in the day, the biggest decline on record.

This was the lowest close of the PSEi in eight years or since Jan. 26, 2012 when the index finished at 4,611.68.

But stock market stakeholders – officials, trading participants, and investors – have been bracing for the market’s freefall especially following the two day shutdown of the local bourse, the first stock market to close amid the spreading coronavirus disease 2019 or COVID-19.

Regulators were able to seek exemption from the Interagency Task Force on Infectious Diseases from the Luzon-wide quarantine. Thus, the stock exchange was able to re-open yesterday.

However, panic selling ensued as market investors reacted negatively on the decision to shut down and on the still unresolved pandemic.

Thus, the PSE-imposed circuit breaker had to take effect again soon after the market opened, to allow investors to manage their positions well. Trading resumed at 9:45 a.m. after a 15 minute halt.

The broader All Shares index likewise went on a tailspin, losing 390.21 points or 11.93 percent to finish at 2,881.58.

All the other gauges were down as well in a bloody red trading session,

“Shares plummeted as investors worried about the economic damage from the pandemic. Oil, which is usually barometer of the health of the global economy dropped by 24 percent to a more than 18-year low as the coronavirus pandemic continues to sap demand for crude, and rising worries about a global recession,” said Luis Limlingan of Regina Capital.

The normal safe haven gold was also down 2.8 percent to $1,485.06 per oz. US gold futures were down 2.4 percent to $1,488.70.

The number of cases continues to climb with now a total of 202 infections, according to the Department of Health. Of the confirmed cases, 17 have died while seven recovered, as of this writing.

The Duterte administration has imposed a Luzon wide black out, shutting down malls and other establishments with the exception of shops selling and providing essential items and services such as groceries, drugstores and banks.