By Denise A. Valdez, Reporter

LOCAL STOCKS dropped to enter bear territory on Monday, battered by sustained worries on the coronavirus disease 2019 (COVID-19) and the collapse of oil prices globally.

The benchmark Philippine Stock Exchange index (PSEi) plunged by 457.77 points or 6.76% to close at 6,312.61 yesterday, while the broader all shares index slumped 224.33 points or 5.55% to 3,815.22.

“With the breaching of 6,700, the local market has entered the bear market,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message. “Market was down heavily as regional markets were down with (COVID-19) spreading rapidly and causing lockdown to other nations.”

The Philippines declared a State of Public Health Emergency yesterday following the Health department’s confirmation of local transmission of the virus over the weekend. Confirmed cases of patients with COVID-19 in the country was at 20 as of writing, including the 10 new cases announced yesterday afternoon.

The panic was not limited to local investors as foreigners also sold their holdings to record a net foreign outflow of P839.29 million, up from the last session’s P271.03 million.

Another reason for the market’s decline yesterday was the oil price war between Saudi Arabia and Russia.

“With the global economy slowing down, oil price war emerged among oil producing countries, particularly Saudi Arabia and Russia, as oil demand slows with slowing global economy, threatening oil producing countries with high debt exposure,” Mr. Pangan said.

The price of oil fell more than 30% as oil producing countries try to address the declining demand for oil due to COVID-19.

“The sudden decrease in the demand for oil due to (COVID-19) was already driving prices lower, but the lack of cooperation between oil producing countries has countries has pushed the price over the edge,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.

Sectoral indices at the local bourse all closed lower as well: financials by 136.60 points or 8.55% to 1,459.63; services by 89.15 points or 6.70% to 1,241.39; industrials by 515.88 points or 6.35% to 7,598.19; holding firms by 409.88 points or 6.19% to 6,202.38; mining and oil by 380.96 points or 6.06% to 5,900.75; and property by 217.92 points or 5.91% to 3,466.95.

Value turnover rose to P6.31 billion with 1.15 billion issues switching hands, against last Friday’s P5.89 billion worth of 632.65 million issues.

Decliners beat advancers by a mile, 204 against 30, with 23 names ending unchanged.

“Not a single stock ended on our top gainers for the day as investors run for the exits. This panic selling may continue till the end of the week,” AAA Southeast Equities’ Mr. Mangun said.

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