Stocks decline on fears of extended lockdown

by

PHILIPPINE shares closed in the red on Tuesday on fears of an extended lockdown in Metro Manila and after the peso closed lower against the greenback on Monday.

The Philippine Stock Exchange index (PSEi) went down by 70.90 points or 1.01% to close at 6,885.36 on Tuesday, while the broader all shares index shed 45.23 points or 1.04% to finish at 4,284.72.

“[Fears] of extended lockdown and vaccination slowdown negated earlier optimism about the economy’s reopening, spurring foreign selling as the PSEi approached 7,000,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message. “Other headwinds include rising inflation this month and currency weakness.”

The Health department said Metro Manila may remain under Alert Level 4 of the government’s alert level system in October as current quarantine classifications lapse on Thursday, Sept. 30. New restrictions for the region are expected be announced this week.

Meanwhile, the peso dropped to P51 per dollar on Monday, its weakest showing in over a year, due to concerns on the upcoming tapering of asset purchases by the US Federal Reserve as well as higher oil prices. This was also 35 centavos lower than its P50.65 close on Friday.

“The local bourse closed lower together with most Asian markets as market participants remained in a cautious stance over the China Evergrande debt crisis and its potential impact to the broader economy,” Darren Blaine T. Pangan, trader at Timson Securities, Inc., said in a separate Viber message.

Most sectoral indices closed in the red on Tuesday except for financials, which rose 2.63 points or 0.18% to end at 1,414.16, and property, which went up by 0.32 point or 0.01% to 3,030.28.

Meanwhile, services shed 35.50 points or 1.82% to close at 1,912.70; industrials dropped 177.77 points or 1.73% to 10,094.37; mining and oil lost 152.05 points or 1.64% to 9,092.13; and holding firms went down by 89.54 points or 1.29% to finish at 6,847.85.

Value turnover surged to P15.04 billion on Tuesday with 2.14 billion issues switching hands, almost twice as much as the P7.61 billion with 1.64 billion shares recorded the previous day.

Decliners outnumbered advancers, 135 against 75, while 38 names closed unchanged.

Net foreign selling ballooned to P1.94 billion on Tuesday from the P623.43 million seen on Monday.

“In the coming days, we’ll see if its nearest support at 6,780 holds. 7,000 seems to be the significant resistance area to watch,” Timson Securities’ Mr. Pangan said.

“The final PMI (purchasing managers’ index) reading and end of [the third quarter] will continue to have investors’ attention for the rest of the week,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. — K.C.G. Valmonte

You may also like

Leave a Comment