By Denise A. Valdez

THE STOCK MARKET on Thursday plunged nearly 10% to its lowest since 2012 as investors headed for the exit amid deepening fears over the coronavirus disease 2019 (COVID-19) outbreak.

This as the World Health Organization (WHO) on Wednesday officially declared the spread of the coronavirus as a global pandemic.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

The benchmark Philippine Stock Exchange index (PSEi) gave up 616.99 points or 9.71% to 5,736.27 on Thursday — its biggest single-day decline since the 12.27% drop in Oct. 27, 2008 at the height of the global financial crisis.

Thursday also saw the PSEi close at its lowest since the 5,636.59 finish on Dec. 18, 2012.

The bearish PSEi plummeted by as much as 10.33% to 5,697.13 during the intraday, triggering the circuit breaker and halting trade for 15 minutes until 3:08 p.m.

The circuit breaker, which is activated when the main index drops by at least 10%, was last used on Oct. 27, 2008.

“Calling today a bloodbath would be the understatement of the year,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message. “As selling pressure from investors stampeding for the exits reached a boil, the PSE’s 10% circuit breaker was hit shortly before 3 p.m.”

Value turnover yesterday stood at P7.96 billion with 981.13 million issues switching hands. Net foreign selling reached P773.90 million, a turnaround from Wednesday’s net foreign buying of P350.50 million.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said it is harder to deal with the current situation as the core problem isn’t something that can be fixed through fiscal and monetary policies.

“If you’re going to compare it to the past, for example the global financial crisis and the Asian financial crisis, back then those were something that you can resolve through the use of stimulus… This time it’s different. What we really need right now is a cure to the virus,” he said in a phone call.

“We know COVID-19 has already spread throughout the world. Many countries are already affected. There are already threats of an economic slowdown, recessions even. Once these happen, it will likely have a heavier impact on the Philippines than in the past,” he added.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said the local stock market “followed the sentiment of the global fears on the epidemic.”

“Its effects are apparently seen in…how it slows down the economic activities of these nations,” he said in a text message. “As we are in the bear market, we could probably expect a slight rebound (today) due to oversold levels… But it may continue to go on a downward bias…depending on the way the government contains this epidemic locally as well as globally.”

For Philstocks’ Mr. Tantiangco, until an actual cure to the virus is discovered, the market is expected to remain on the down side. “The primary backdrop is still the lingering epidemic,” he said.

PNB Securities’ Mr. Lisbona agrees: “The market will be volatile the next few days with bargain hunters coming in to pick up badly beaten names. Selling pressure on the whole will prevail, however.”

President Rodrigo R. Duterte was scheduled to address the public on Thursday night, amid the increasing number of COVID-19 cases in the country.

The Department of Health announced three new coronavirus cases in the country, bringing the total number to 52.

Finance Secretary Carlos G. Dominguez III, who is under home quarantine after contact with a known COVID-19 case, told reporters yesterday the government has “all the tools — medical, financial and monetary — to successfully handle this situation.”

Meanwhile, the peso sank against the greenback on Thursday due to negative investor sentiment as the COVID-19 continues to spread.

The local unit finished trading at P50.85 against the dollar on Thursday, plunging 30 centavos from its P50.55 close on Wednesday, according to data from the Bankers Association of the Philippines.

The peso opened the session at P50.65. The peso sank to the P51-per-dollar level intraday, dropping to as low as P51.05, while its intraday best was at P50.63 against the greenback.