Equities slump continues, PSEi down 7.92%

Local stock market investors found no relief on Monday as a surprise 1-percent interest rate cut by the US Federal Reserve to zero alongside a fresh $700-billion bond buyback failed to soothe global financial markets.

The Philippine Stock Exchange index (PSEi) fell by 458.57 points or 7.92 percent to close at 5,335.37, in line with the unabated selloff of Asian emerging market equities. Rumors of a total lockdown of Metro Manila further spooked investors.

This is the lowest close since Oct. 1, 2012, when the PSEi finished at 5,307.52.

Meanwhile, US stock futures declined sharply.

At the local market, there was P741.72 million worth of net foreign selling.

All counters ended in the red, led by holding firms, which tumbled by 10 percent.

Jonathan Ravelas, chief strategist at BDO Unibank, said the PSEi was at risk of breaking the 5,000 support.

AAA Equities head of research Christopher Mangun said another week of volatile trading was expected this week as investors remained uncertain on how to position themselves in this market.

“There is also a lot of confusion on the lockdown of Metro Manila that went into effect this Sunday, March 15,” Mangun said.

“From a technical standpoint, all indicators are pointing to a continuous decline. The main index blew through several major support levels that have been turning points multiple times over the last decade,” he said.

If the main index could stay above the 5,000 support level in the coming weeks, Mangun said this might serve as a bottom and the index could start to move higher.

Mangun said it was almost guaranteed that the Bangko Sentral ng Pilipinas would reduce interest rates at its policy meeting later this week following the lead of central banks abroad to cushion the negative economic effects of COVID-19, with some analysts expecting a half-percentage-point reduction. “This is positive news for our economy (but) investors have not been paying attention to economic fundamentals,” he said.

On Monday, the financial counter plunged 8.93 percent while the property counter lost 7.78 percent.

The mining/oil counter declined by 4.32 percent while the industrial and services counters both lost more than 2 percent.

Value turnover for the day amounted to P6.44 billion.

There were 145 decliners that overwhelmed 46 advancers, while 40 stocks were unchanged.

Jollibee was among the most battered PSEi stocks, diving 14 percent, as the new pandemic is expected to impact on restaurant sales.

BDO Unibank shed 13.39 percent while Ayala Land, the day’s most actively traded company, fell by 12.73 percent.

AGI and SM Investments both lost more than 11 percent while Ayala Corp. declined by 10.53 percent.

BPI fell by 8.38 percent and AEV by 7.24 percent.

Metro Pacific and JG Summit both lost more than 6 percent while SM Prime slipped by 5 percent.

PLDT dropped by 4.76 percent and Metrobank lost 3.76 percent.

Among the few that bucked the day’s downturn was Globe Telecom, which added 4.92 percent, while Meralco gained 1.25 percent. URC firmed up by 0.84 percent.

One notable gainer outside the PSEi was Emperador, which rose by 3.22 percent. Doris Dumlao-Abadilla