PSEi down by almost 5% on second wave fears

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By Denise A. Valdez, Reporter

THE MAIN INDEX plummeted on Monday on increasing worries over a second wave of coronavirus disease 2019 (COVID-19) cases across the world.

The bellwether Philippine Stock Exchange index (PSEi) erased 312.42 points or 4.82% to settle at 6,163.82 at the end of session. The broader all shares index likewise wiped out 152.33 points or 4.01% to end at 3,646.83.

“The risk-off sentiment was prompted by rising concerns that the ‘second wave’ of infections has started,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message.

Data from the Johns Hopkins Coronavirus Resource Center showed there were 7.91 million COVID-19 cases across the world as of Monday, with new cases reaching about 134,000 on Sunday.


“US markets declined about 1,800 points last Thursday with a weak snapback on Friday. But since we were on holiday, investors were only able to react today (Monday),” Mr. Lisbona said.

The decline in the local market is in line with the drop across Asian markets. Japan’s Nikkei 225 and Topix indices fell 3.47% and 2.54%, respectively. China’s Shanghai Shenzhen CSI 300 index dipped 1.20% and South Korea’s Kospi index slid 4.76%.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said another factor that weighed on sentiment is the fate of the quarantine in Metro Manila. The relaxed lockdown currently in place over the region is set to expire Monday. Investors are awaiting announcement from the government whether the quarantine will be tightened, maintained or further eased by Tuesday.

“[T]raders booked some gains for now as they braced themselves for the government’s decision on lockdown measures after June 15… We see how optimistic the market was as the global economy slowly reopened, however, the reaction was way too quick which could really trigger profit taking,” Ms. Alviar said in a text message.

“It doesn’t seem like the market will be able to bounce off 6,130 but instead test the psychological 6,000 level and possibly retest 5,850 if more investors become bearish,” Mr. Lisbona added.

All sectoral indices at the PSE closed in red territory on Monday. Property dropped 187.58 points or 5.71% to 3,093.40; financials fell 72.30 points or 5.59% to 1,218.99; holding firms shaved off 311.33 points or 4.70% to 6,300.53; mining and oil lost 220.25 points or 4.22% to 4,992.28; industrials slid 261.86 points or 3.22% to 7,867.70; and services declined 43.28 points or 2.99% to 1,399.72.

Value turnover increased to P7.76 billion from P7.04 billion in the previous session.

But volume fell to 1 billion issues switching hands from 1.87 billion issues in the last session.

Decliners outnumbered advancers, 178 against 39. Some 29 names ended unchanged.

Foreign investors ended as net sellers, with net outflows growing to P1.18 billion from P63.15 million on Thursday.