THE Philippine Stock Exchange index (PSEi) fell on Thursday, Oct. 29, 2020, as it mirrored the decline in global markets amid a spike in coronavirus cases.
The main-share index decreased by 2.01 percent or 128.4 points to close at 6,249.39.
According to AB Capital Securities Inc., all PSEi issues declined except for SM Prime Holdings Inc., which was up by 0.92 percent, and Manila Electric Co. (Meralco), which increased by 1.03 percent.
The worst losers were led by Swift Foods Inc., whose share price dived by 20.53 percent, followed by Pacifica Holdings Inc., which went down by 12 percent.
Other losers were TKC Metals Corp., Bright Kindle Resources and Investments Inc., Forum Pacific Inc., Aboitiz Equity Ventures Inc., Ayala Land Inc., Victorias Milling Co. and SSI Group Inc.
Other Asian shares declined Thursday and U.S. futures were higher after the S&P 500 slid 3.5 percent overnight for its biggest drop since June.
The selling in U.S. markets followed broad declines in Europe, where the French president announced tough measures to slow the spread of the coronavirus and German officials agreed to impose a four-week partial lockdown.
Covid-19 fears
So far, the measures are not as stringent as shutdown orders that swept the world early this year, but the worry is they could still hit the already weakened global economy.
In Asia, some countries appear to be keeping the pandemic in check, while caseloads surge in others.
India surpassed eight million confirmed Covid-19 cases, second only to the U.S., with nearly 8.86 million. Indonesia and the Philippines are struggling to keep outbreaks in check, and fresh clusters of cases are being reported in Japan.
The Bank of Japan kept its ultra-loose monetary policy unchanged in a policy meeting that ended Thursday. But it downgraded its outlook for the economy, saying that while conditions will eventually improve, “risks to both economic activity and prices are skewed to the downside, mainly due to Covid-19.”
Retail sales in Japan, the world’s third largest economy, fell 8.7 percent from a year earlier in September, according to data reported Thursday. While purchases of goods has recovered somewhat, services remain weak.
Markets
In Thursday trading, Hong Kong’s Hang Seng lost 0.7 percent to 24,530.12 while the Nikkei 225 in Japan fell 0.2 percent to 23,362.49. In South Korea, the Kospi lost 1.0 percent to 2,320.82, while the Shanghai Composite index recovered from early losses, gaining 0.1 percent to 3,271.72 ahead of the announcement of a major Communist Party planning document. Australia’s S&P/ASX 200 declined 1.4 percent to 5,971.10. Shares also fell in Taiwan.
The future for the S&P 500 rebounded, gaining 1.0 percent to 3,297.20, while the future contract for the Dow industrials added 1.1 percent to 26,703.
In the U.S., cases are increasing in just about every state and the number of deaths and hospitalizations due to Covid-19 are on the rise. Even if the most restrictive lockdowns don’t return, investors worry people will limit their spending and activities, hurting businesses. The U.S. economy could lose momentum just as prospects for more economic support from Washington have dwindled as Tuesday’s Election Day nears.
Uncertainty about the upcoming presidential election has also been pushing markets around.
The S&P 500 lost 119.65 points to 3,271.03. The Dow lost 943.24 points, or 3.4 percent, to 26,519.95. The Nasdaq composite slumped 3.7 percent to 11,004.87. The selling was widespread, and 96 percent of stocks in the S&P 500 fell.
Crude oil wavered between losses and gains. U.S. benchmark crude picked up 11 cents to $37.50 per barrel in electronic trading on the New York Mercantile Exchange. It tumbled 5.7 percent Wednesday on worries that an economy already weakened by the virus would consume even less energy and allow excess supplies to build higher.
Brent crude, the international standard, added 4 cents to $39.68 per barrel. It fell 5.4 percent to $39.64 per barrel on Wednesday.
The VIX, which measures how much volatility investors expect from the S&P 500, climbed 20.8 percent Wednesday, the highest level since June amid concerns that a “second wave” of coronavirus infections had started.
As usual whenever volatility spikes, investors headed into the safety of U.S. government bonds. The yield on the 10-year Treasury note was at 0.79 percent, down from as high as 0.87 percent last week. (SunStar Philippines / AP)