People watch trading boards at a private stock market gallery in Kuala Lumpur, Malaysia on Monday. Stocks tumbled across Asia on Monday as investors, shaken by fears of a China-led global economic slowdown and Wall Street sell-off, unloaded shares in practically every sector.
(AP Photo)
The Philippine stock market yesterday saw its worst single-day drop in history as concerns over China’s economy and the slump in commodity prices triggered a bloodbath across global markets. The Philippine Stock Exchange index (PSEi) plunged 6.7 percent, or 487.97 points, to close at 6,791.01. In a single session, the PSEi has now given up all gains eked out at the beginning of the year. The local stock index closed in 2014 at 7,230.57, up 22.8 percent for the year.
In terms of number of points, this was the biggest decline in a single day, resulting in loss of P764 billion in market capitalization in a single day.
In terms of percentage decline, this was the 11th sharpest decline in the history of the local bourse.
The market had seen worse decline during the US-epicentered global financial crisis, for instance, when the PSEi dropped by 12.27 percent on Oct. 27, 2008.
Analysts blamed the downturn on the sharp fall in stocks in China and the United States.
The bloodbath was seen across Asia as shares declined dramatically on Monday, led by more than eight percent fall in Shanghai, after concerns about a China-led global slowdown sparked a sell-off in global financial markets.
Overnight, the closely watched Dow Jones Industrial Index tumbled by 3.12 percent.
“Eighty to ninety percent of this sell-off is due to what is happening in China and the US. If you examine our fundamentals, we are still intact,” Louis Limlingan, head of sales at Regina Capital Development told AFP.
Banco de Oro Unibank chief strategist Jonathan Ravelas said the PSEi was at risk to test the 6,800 level in the near term.
“Market players were emotional as they digested the weakness in US markets and negative data from China, causing the local currency and stock market to slide to new lows,” he said.
Monday’s decline turned the PSEi’s remaining year-to-date gain into a loss of around 6 percent.
“We are being dragged down by the larger world economy,” Limlingan said.
He said the rout was compounded by the Philippines having a holiday on Friday when there was no trading.
“We are playing reverse-catch up. We were closed Friday so we did not react to the US performance (last week),” he said.