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Stocks drop on lack of leads, Delta variant fears

PHILIPPINE shares closed in negative territory on Wednesday amid a lack of catalysts and worries over the Delta variant of the coronavirus disease 2019 (COVID-19).

The bellwether Philippine Stock Exchange index (PSEi) dropped by 54.74 points or 0.78% to end at 6,901.91 yesterday, while the broader all shares index fell by 17.79 points or 0.41% to close at 4,244.58.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a mobile phone message that the market fell on Wednesday amid the absence of leads and lingering concerns over the new COVID-19 variant.

“The sentiment was further pulled by the worries over the Delta variant and by the downgrade of the Philippine economic growth forecast to 6.4% this year by the ASEAN+3 Macroeconomic Research Office (AMRO),” Ms. Alviar said.

In its latest Annual Consultation Report released on June 29, AMRO revised its 2021 gross domestic product (GDP) for the Philippines to 6.4%, lower than its previous estimate of 6.9% growth.

Despite being lower, AMRO’s estimate is still within the 6-7% growth target of the government for 2021.

Darren Blaine T. Pangan, trader at Timson Securities, Inc., said in a mobile phone message that the bourse ended lower as investors remained cautious as they continue to monitor the progress of the government’s vaccination program.

About 10.07 million doses of COVID-19 vaccines have been administered since the start of the country’s inoculation program in March, the Health department said on Monday. Of the total, 7.54 million were first does while the remaining 2.53 million were second doses.

The government is eyeing to fully vaccinate as many as 70 million people against COVID-19 by yearend to attain herd immunity.

Sectoral indices were mixed at the end of Wednesday’s trading. Property went down by 59.12 points or 1.74% to 3,321.71; holding firms declined by 65.01 points or 0.93% to 6,920.49; and financials retreated by 12.92 points or 0.85% to 1,498.54.

Meanwhile, mining and oil improved by 86.96 points or 0.92% to close at 9,543.67; services gained 7.86 points or 0.49% to 1,590.80; and industrials rose by 3.09 points or 0.03% to 9,630.09.

Value turnover reached P6.38 billion on Wednesday with 1.85 billion issues switching hands, up from the P5.21 billion with 1.82 billion shares seen the prior day.

Decliners bested advancers, 109 against 94, while 47 names ended unchanged.

Net foreign selling amounted to P730.73 million, higher than the P379.35 million logged on Tuesday.

“6,800 is where support may be drawn, while 7,080 remains the PSEi’s immediate resistance area,” Timson Securities’ Mr. Pangan said.

“The local bourse will test the 6,900 support area, but given the lack of positive catalysts, it may fail to stay above that level. Investors will be monitoring the COVID-19 daily cases, as well as the new more infectious variant, the Delta Variant. Meanwhile, we may also see month-end window dressing, particularly in the index stocks,” Philstocks Financial’s Ms. Alviar added. — Revin Mikhael D. Ochave

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