By Denise A. Valdez, Reporter

THE MAIN INDEX succumbed to the 5,700 level yesterday, seeing a massive sell-off due to lingering worries over the coronavirus disease 2019 (COVID-19) pandemic.

The benchmark Philippine Stock Exchange index (PSEi) lost 616.99 points or 9.71% to 5,736.27 on Thursday, while the broader all shares index shaved off 315.96 points or 8.29% to 3,492.77.

This is the biggest single-day drop of the PSEi since Oct. 27, 2008 when it lost 12.27%, and its lowest close since Dec. 18, 2012 when it hit 5,636.59.

Trading yesterday also triggered the circuit breaker — or when the market halts trading after reaching a threshold — which in the case of the local bourse, was at least a 10% drop in the main index. The break was from 2:53 p.m. to 3:08 p.m., giving time to investors to digest the market’s movement.

The PSE said yesterday’s event was just the second time the circuit breaker was triggered since it was implemented in September 2008. The first one was on Oct. 27, 2008.

“The PSEi suffered one of its worst daily performances today in the last 20 years,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Thursday.

“Investors reacted to the possibility of a lockdown in Metro Manila to contain the COVID-19 disease before we have a massive outbreak. The sudden selling coupled with a lack of buying sent prices into a freefall, something we have not seen since the last financial crisis,” he added.

The meltdown was not limited to the Philippines, as global equities similarly declined yesterday. Japan’s Nikkei 225 and Topix indices lost 4.41% and 4.13%, respectively. Hong Kong’s Hang Seng index dropped 3.66%, China’s Shanghai Shenzhen CSI 300 index gave up 1.92% and South Korea’s Kospi index fell 3.87%.

US markets also recorded sell-offs on Wednesday. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices slumped 5.86%, 4.89% and 4.70%, respectively.

“The general sentiment has gone from fear to hysteria which may continue until we see more evidence that the virus can be contained,” Mr. Mangun said.

All sectoral indices at the PSE closed lower yesterday: mining and oil by 725.77 points or 12.76% to 4,961.75; property by 371.53 points or 10.82% to 3,061.86; financials by 153.50 points or 10.11% to 1,364.01; holding firms by 624.21 points or 10.02% to 5,600.90; services by 87.91 points or 7.11% to 1,148.31; and industrials by 481.38 points or 6.33% to 7,117.18.

Some 981.13 million issues valued at P7.96 billion switched hands yesterday, up from Wednesday’s 687.59 million issues worth P6.62 billion.

There were 226 names that declined at the market’s closing, beating the seven names that advanced. Some 25 names ended unchanged.

Foreign investors returned to selling with net foreign outflows of P773.90 million from Wednesday’s net foreign buying of P350.50 million.

RELATED ARTICLESMORE FROM AUTHOR