Stocks drop as infection surge clouds outlook

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

PHILIPPINE shares declined on Monday as investors remained cautious amid the continued surge in coronavirus disease 2019 (COVID-19) cases and as Metro Manila and nearby provinces were placed under a slightly more loose lockdown.

The benchmark Philippine Stock Exchange index (PSEi) declined by 26.53 points or 0.4% to close at 6,518.64 on Monday, while the broader all shares index went down by 10.39 points or 0.26% to 3,988.25.

AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said continued uncertainty over the pace of economic recovery is a major concern as COVID-19 cases climb further.

“After last week’s surprising positive performance, investors were expecting stronger buying pressure at the beginning of the session,” Mr. Mangun said via e-mail. “However, buyers were not interested, which caused selling pressure to pick up towards the end of the session. Clarity on the guidelines of current MECQ (modified enhanced community quarantine) restrictions may be the reason why investors held back.”

“The surge and threat of [COVID-19], community quarantine and its impact on business continues to drive cautious regard from investors,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message.

The country logged 11,681 new COVID-19 cases on Sunday. The government announced that the NCR Plus bubble would be placed under MECQ until April 30.

“The lack of good daily volume, less than P5 billion daily, persists and could also be a contributing factor to the market’s listlessness,” Mr. Barredo added.

Value turnover increased to P5.97 billion on Monday with 2.43 billion shares switching hands from the P5.02 billion on Thursday, with 3.52 billion issues traded.

Majority of sectoral indices declined on Monday, except for financials, which gained 3.56 points or 0.25% to 1,391.03.

Meanwhile, mining and oil fell by 112.20 points or 1.32% to finish at 8,386.11; industrials declined by 56.21 points or 0.63% to 8,834.68; property dropped by 15.34 points or 0.47% to 3,238.33; services inched down by 6.68 points or 0.46% to close at 1,422.66; and holding firms lost 27.40 points or 0.41% to end at 6,604.96.

Decliners outnumbered advancers, 120 against 86, while 48 names closed unchanged.

Net foreign selling went up to P869.25 million on Monday from the P811.97 million seen in the previous trading day.

AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad expects the index to trade from 6,400 to 6,700 today. Meanwhile, AAA Southeast Equities’ Mr. Mangun said the index might move towards 6,400, with sideways trading expected until the end of the week.

“The index is experiencing some pressure after recently rallying close to resistance of 6,700-6,800. As long as the index stays below this threshold, it would remain in corrective territory,” COL Financial’s Mr. Barredo said. — Keren Concepcion G. Valmonte

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