The stock market plummeted Monday along with the rest of Asia, as interest rate cuts and fresh stimulus measures by global central banks failed to lift confidence.
The Philippine Stock Exchange Index slumped 458.57 points, or 7.9 percent, to 5,335.37 on a value turnover of P6.4 billion. Losers overwhelmed gainers, 145 to 46, with 40 issues unchanged.
Jollibee Foods Corp., the biggest fast-food chain, sank 13.9 percent to P121, while BDO Unibank Inc., the largest lender in terms of assets, tumbled 13.4 percent to P110.
Major property developer Ayala Land Inc. fell 12.7 percent to P28.80, while Alliance Global Group Inc. of tycoon Andrew Tan dropped 11.4 percent to P8.02.
The rest of Asian markets tumbled Monday, with analysts warning that the Federal Reserve may have reached the limits of its power to fend off recession as the coronavirus spreads.
Sydney led losses, tumbling 9.7 percent in its worst drop on record, while Bangkok and Mumbai dropped more than five percent.
Hong Kong, Singapore, Jakarta and Wellington were all down more than three percent.
Shanghai dropped tumbled 3.4 percent after the release of the industrial production data, which came a week after news that Chinese exports had collapsed.
Tokyo ended 2.5 percent lower, after a rally sparked by the Bank of Japan’s support measures announcement fizzled.
The Fed move added to efforts by central banks around the world to combat the outbreak, which observers say will likely cause a global recession.
The scale of the crisis was laid bare by data showing Chinese industrial production for January and February shrank 13.5 percent, the first contraction in around 30 years.
Equity markets continue to be whipsawed by the disease, which has now infected almost 170,000 people and killed more than 6,000 with several countries going into lockdown as Europe becomes the new epicenter of the outbreak.
The Fed on Sunday slashed borrowing costs to almost zero—its second emergency cut in less than two weeks—and unveiled a massive asset-buying program, similar to measures put into place during the global financial crisis.
The Bank of Japan on Monday unveiled a series of emergency monetary policy measures, saying it would ramp up its own bond-buying program.
New Zealand’s central bank also slashed rates to record lows in an attempt to cushion the economic blow, while the People’s Bank of China has injected vast sums into financial markets to ease liquidity worries.
In joint action coordinated with the European Central Bank, Bank of England, Bank of Japan, Bank of Canada and the Swiss National Bank, the central banks moved to counteract global “dollar funding pressures,” said Fed boss Jerome Powell.
But traders were left unimpressed, with the virus showing no sign of letting up, while the head of the World Health Organization chief Tedros Adhanom Ghebreyesus said it was impossible to tell when it would peak globally.
“While these moves may go some way to easing any potential blockages in the plumbing of the financial markets, they won’t adequately compensate for the upcoming economic shocks that are about to come our way as a result of the events currently unfolding across Europe, as borders get closed and populations get locked down,” said CMC Markets analyst Michael Hewson. With AFP
