THE MAIN INDEX closed the week in the red to end seven consecutive days of gains as the country’s unemployment rate surged, dampening market and investor sentiment.
The 30-member Philippine Stock Exchange index (PSEi) fell 0.8% or 52.36 points to close at 6,465.13 while the broader all-shares index declined 0.31% or 11.75 points to finish at 3,773.28.
In a mobile phone message, Philstocks Financial, Inc. Research Associate Claire T. Alviar said the grim unemployment rate dragged the sentiment of investors.
“High unemployment rate would cut or delay the growth of businesses, so their contribution to the economy would decline,” Ms. Alviar said.
On Friday, the Philippine Statistics Authority reported that the country’s unemployment rate rose to 17.7% for April 2020, versus 5.3% in January.
The unemployment rate is the highest since 2005 and is equivalent to around 7.3 million Filipinos left jobless as the coronavirus disease 2019 (COVID-19) pandemic forced many businesses to stop operating when lockdown measures were imposed.
Ms. Alviar said the high unemployment rate could be attributed to weaker consumer spending due to the COVID-19 pandemic, which she said “puts another burden to the economy.”
“Although, it is anticipated already that the jobless rate would increase due to the COVID-19 pandemic, the adverse impact of it still lingers,” she said.
In a mobile phone message, Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said that investors decided to take their profits after the market’s seven-day rally.
“This is despite foreigners being net buyers for the day amounting to around P470 million,” Mr. Pangan said.
In a mobile phone message, PNB Securities, Inc. President Manuel Antonio G. Lisbona said that investors should still be cautious as the risk of a second and larger wave of COVID-19 infections has not yet been eliminated in the absence of a vaccine.
“For now, the market is expected to be volatile with some more profit-taking to be expected in the next sessions,” Mr. Lisbona said.
Ms. Alviar said the market’s seven-day rally also makes it vulnerable to investors taking profit at the end of the trading week.
“There’s really a higher chance that investors would profit take at the end of the trading week. The straight days of rally makes the market susceptible to profit taking,” she said.
Two sectoral indices ended Friday’s session higher. Financials rose 1.49% or 20.08 points to 1,361.19 while the mining and oil index inched up 5.51% or 258.6 points to 4,947.
The rest of the sectoral indices declined. Industrials went down 0.38% or 30.26 points to 7,804.75; holding firms retreated 1.11% or 74.51 points to 6,611.71; property shrank 0.81% or 26.93 points to 3,259.48; and services fell 1.97% or 28.19 points to 1,396.91.
Advancers outpaced decliners 118 to 77 while 43 names ended unchanged.
On Friday, net foreign selling reached P476.37 million versus the P1.37 billion in the previous day.
“The next resistance may be placed at 6,550 while immediate support is at the 6,200 area,” Mr. Pangan said. — Revin Mikhael D. Ochave