Stocks drop further on virus, economic worries

THE LOCAL MARKET closed lower on Thursday amid investor concerns over climbing coronavirus disease 2019 (COVID-19) cases and a dimmer outlook for the Philippine economy.

The 30-member Philippine Stock Exchange index (PSEi) fell by 70.57 points or 1.14% to close at 6,118.26. The broader all shares index lost 42.45 points or 1.16% to 3,600.98.

PNB Securities, Inc. President Manuel Antonio G. Lisbona in a text message blamed the market’s close on investor concern that the country’s COVID-19 cases may also increase after reports of rising infections in the United States.

“The market continued its downward trek today, closing below our first support level at 6,130, as investors chose to cash in on their positions out of COVID-19 concerns,” Mr. Lisbona said on Thursday.

As of June 25, total COVID-19 cases in the United States reached 2.38 million, with 121,979 people dying from the virus, according to the Johns Hopkins University Center for Systems Science and Engineering COVID-19 dashboard.

Aside from rising COVID-19 cases, for Philstocks Financial, Inc. Research Associate Claire T. Alviar, the market’s performance was heavily affected by the International Monetary Fund’s (IMF) revised Philippine economic outlook.

“(The) IMF projected the Philippine economy to shrink by 3.6%, from April’s forecast of 0.6% growth. Sentiments were dented as the figure is worse than the World Bank’s 1.9% contraction estimate and the government’s estimate of 2 — 3.4% decline,” Ms. Alviar said in a mobile phone message.

All sectoral indices fell on Thursday except for property, which rose 6.74 points or 0.22% to close at 3,033.84.

“Property sector is the sole gainer today due to bargain hunting after the sell-off on Wednesday,” Ms. Alviar said on Thursday.

Mining and oil dropped 154.04 points or 2.92% to 5,119.32; financials retreated 31.96 points or 2.54% to 1,225.07; holding firms went down 93.48 points or 1.44% to 6,358.63; services shrank 17.32 points or 1.25% to 1,366.84; and industrials fell 54.54 points or 0.71% to 7,575.52

Value turnover stood at P6.75 billion with 1.34 billion issues switching hands, versus the P6.64-billion worth of 3.8 billion issues on Wednesday.

Decliners outpaced advancers, 139 to 58, while 38 names remained unchanged. Net foreign selling on Thursday narrowed to P662.42 million compared to P2.07 billion the previous day.

“We are looking at some psychological support at 6,000 though if things worsen, we might find ourselves back at 5,700 to 5,800,” Mr. Lisbona said.

Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said in a text message that the next major support area is around the 6,000 level while resistance remains at the 6,600 level.

“Tomorrow (Friday) being the last day of the week, we may have to observe if investors would be comfortable holding positions through the weekend,” Mr. Pangan said. — Revin Mikhael D. Ochave