The bearish local stock market saw on Monday its worst bloodbath since the global financial crisis 12 years ago as the coronavirus epidemic (COVID19) started spreading locally while a collapse in global oil prices stoked global recession fears.
Tracking the relentless dumping of equities across global markets, the Philippine Stock Exchange index (PSEi) lost 457.77 points or 6.76 percent to close at 6,312.61.
This marked the PSEi’s steepest decline since October 27, 2008, when it lost 12.27 percent during the global financial crunch that started in Wall Street.
The day’s close also marked the PSEi’s weakest finish since Pres. Rodrigo Duterte assumed the presidency in 2016.
Risk aversion intensified as local transmission of COVID19 prompted the government to call for a “code red,” deemed as a “preemptive call to ensure that national and local governments and public and private health care providers can prepare for possible increase in suspected and confirmed cases.”
“The recent code red advisory triggered the sell-off. The ticker was glaring red the whole trading period. It’s still difficult to determine when PSEi will be resuscitated,” said Astro del Castillo, managing director at First Grade Investments.
“The worsening health crisis worldwide and its consequences to the global economy are enough reasons for investors to dump their shares today. A clearer government continuity program could ease the nerves of investors,” Del Castillo added.