In file photo: Stock prices are displayed on an electronic stock board at the Asia Plus Securities Pcl headquarters in Bangkok, Thailand (Photographer: Dario Pignatelli / Bloomberg)

SHARE prices sank to their lowest in eight years when trading resumed on Thursday on lingering fears on the coronavirus disease 2019 (Covid-19), as analysts are now talking on the possibility of a global recession caused by the pandemic.

The benchmark Philippine Stock Exchange index (PSEi) fell 711.95 points or 13 percent to close at 4,623.42 points, as all other sub-indices ended in the red. The last time the main index was at this level was on January 26, 2012, when it closed at 4,611.68 points.

There was no trading on Tuesday and Wednesday as the government ordered the shutting down of most businesses in Luzon due to the enhanced community quarantine. Authorities were able to secure an exemption of the capital market from the shutdown, but no one is allowed at the trading floor.

The market started weak, plummeting 12 percent at the start of the trade, triggering again the circuit breaker, which is activated when prices fall 10 percent, and results in a 15-minute trading halt. It sank deeper when trading resumed, falling 1,296.22 points or 24 percent to 4,039.15. It then recovered gradually at mid-day. The last time the main index was at that range was on October 7, 2011, when it closed at 4,009.26.

Thursday was the PSE’s worst intra-day fall on record since the introduction of PSE, at 13.34 percent.

“The numbers show us the intensity of the pessimism in the volatile market today as the fears over Covid-19 and its socioeconomic impact both here and abroad continue to weigh on investor sentiment. Onshore, investors are discounting the economic disruptions of the enhanced community quarantine in mainland Luzon,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said.

“Offshore, we’re already seeing recession signals from advanced economies. The two-day shutdown has also contributed to today’s sell-off as it dented the confidence of investors who try to maintain the liquidity of their financial assets,” Tantiangco said.

According to analysts, the domestic market may not see its bottom just yet as the global economy reels from the pessimism and fears caused by Covid-19.

“Oil, which is usually a barometer of the health of the global economy, dropped 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,” Luis Limlingan, managing director at Regina Capital and Development Corp., said.

Total volume of trade was valued at P9.42 billion, while foreign investors dumped local shares and were net sellers at P2.4 billion.

Decliners led gainers 211 to just 8, and 21 shares were unchanged.

Other sub-indices were all down, led by the broader All Shares index that fell 390.21 points to 2,881.58 points. The Financials index declined 198.24 to 1,090.95, the Industrial index plunged 919.47 to 5,975.43, the Holding Firms index lost 669.38 to 4,435.78, the Services index retreated 134.79 to 1,026.68, the Mining and Oil index plummeted 802.60 to 3,720.87 and the Property index shed 344.45 to 2,408.60.

SM Investments Corp. was the day’s most active and it fell P68 to close at P667 per share, BDO Unibank Inc. lost P25 to P85, SM Prime Holdings Inc. gave up P1.50 to P27, Ayala Land Inc. was down P5.85, Ayala Corp. retreated P116 to P394 and Emperador Inc. shed P1.56 to P7.74.


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