The local stock barometer plunged to the 6,500 level on Monday as investors worried that a new wave of infection caused by the highly transmissible Delta coronavirus variant may derail economic recovery.
The Philippine Stock Exchange index (PSEi) tumbled by 106.63 points or 1.59 percent to close at 6,587.20, in line with the downturn across global markets.
Foreigners, whose collective ownership of local stocks is now at a record low, continued to pare their local equity holdings. Net foreign selling amounted to P362.2 million for the day.
“Philippine shares were sold again ahead of the holiday and as investors keep vigilant on the Delta variant spreading globally and more key data set to be released,” said Luis Gerardo Limlingan, managing director at local stock brokerage Regina Capital Development.
New wave
Just when the pace of local COVID-19 vaccination is picking up, concerns escalated on a new wave of infection that may arise from the more contagious Delta variant. The Philippines reported its first local transmission of this COVID-19 strain last week.
The weak market sentiment was due to a confluence of events that started with the recent revision of Fitch Ratings’ outlook on Philippine sovereign credit to “negative” from “stable,” said Joseph Roxas, president of Eagle Equities.
“Then the Delta variant has been a concern not just here but in the whole region. It’s also a problem in Vietnam, Indonesia, Malaysia and Thailand,” Roxas said.
He noted that, at the very least, the volume of daily foreign selling had declined compared to outflows in previous days. He also noted some foreign buying in selected stocks like Manila Water and AC Energy.
If the 6,500 support level would be breached, Roxas said the next barrier would be at around 6,300.
Downturn
Meanwhile, other investors hedged their bets ahead of the non-working holiday in the Philippines.
There will be no stock market trading today, July 20, in observance of Eid al-Adha (Islamic Feast of Sacrifice).
All counters ended in the red, led by the property counter, which slid by 3 percent.
The financial holding firm and services counters all lost over 1 percent, while the industrial and mining/oil counters slipped by less than 1 percent.
Investors dumped shares of RLC, which lost 4.84 percent, while Ayala Land fell by nearly 4 percent.
Ayala Corp. and Metrobank lost over 3 percent, while SM Prime and ICTSI declined by nearly 3 percent.
LTG and Security Bank shed over 1 percent.
SM Investments, BDO, BPI and Globe Telecom all slipped by less than 1 percent.
Notable decliners outside the PSEi included newly listed Monde Nissin, which lost 3.19 percent, while Semirara slipped by 2.68 percent.
Jollibee and Megaworld bucked the day’s downturn, both rising by less than 1 percent.
The day’s most actively traded company was AC Energy, which firmed up by 0.24 percent. This is a market favorite to become a new PSEi member-stock in the next index rebalancing.
Meanwhile, Converge added 2.62 percent.Since the start of the year, the PSEi has declined by about 552.51 points or 7.7 percent. INQ