WORRIES of a worsening economy left investors wary, pulling down the 30-member main stock index to close lower a day after the country saw a contraction in gross domestic product (GDP) that ended a 21-year growth streak.

On Friday, the Philippine Stock Exchange index (PSEi) fell by 0.55% or 31.22 points to 5,621.94 while the broader all-shares index went down by 0.29% or 10.08 points to 3,403.8

In a text message, PNB Securities, Inc. President Manuel Antonio G. Lisbona said that the decline was due to investors still feeling the effects of a GDP falling into negative territory.

“Investors are probably extrapolating an even deeper decline in the second quarter, given the effect of just a two-week lockdown starting at the tail-end of the first quarter on GDP growth,” he said.

Mr. Lisbona added that index heavyweights such as SM Investments Corp. (SM), Ayala Land, Inc. (ALI), and Manila Electric Co. (Meralco) were consequently sold down.

On Friday, SM shares declined by 2.72% or P22.50 to P804 each, ALI shares went down by 3.26% or P1.10 to P32.65 per share, and Meralco shares fell 1.56% or P4 to P252 apiece.

On Thursday, the Philippine Statistics Authority reported that the GDP contracted by 0.2% during the first quarter. The last time that the country’s GDP fell was during the fourth quarter of 1998.

In a text message, Philstocks Financial, Inc. Research Associate Claire T. Alviar said that the sudden spike in new coronavirus disease 2019 (COVID-19) cases for two consecutive days added to the negative sentiment in the market.

As of Friday afternoon, the Department of Health (DoH) reported 120 additional cases, bringing the total confirmed COVID-19 cases to 10,463.

The DOH bulletin placed the latest number of deaths to 696, while 1,734 patients have successfully recovered from the disease.

“The impact of enhanced community quarantine caused by the COVID-19 pandemic was really substantial in the economy, and this impact is expected to be severe in the second quarter,” Ms. Alviar said.

“Investors seem to be more comfortable being on cash over the weekend to avoid any unexpected events,” Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said in a text message.

Industrials rose 0.2% or 14.65 points to 7,326.79; holding firms went up 0.04% or 2.48 points to 5,532.27; mining and oil improved 0.19% or 8.78 points to 4,520.85.

On the other hand, financials fell 1.08% or 12.61 points to 1,148.08; property dropped 1.21% or 35.95 points to 2,934.97; services shrank 0.18% or 2.38 points to 1,322.68.

Mr. Pangan said that the national government’s decision on whether to continue the enhanced community quarantine (ECQ) or shift to a less-restrictive general community quarantine might affect market sentiment next week.

“The government’s decision on the ECQ and whether it will be lifted or not on May 15 is being closely monitored as this may affect next week’s market movement,” Mr. Pangan said.

Decliners outpaced advancers 90 to 75, with 55 names unchanged. Net foreign selling was at P771.19 million, more than double the previous day’s net selling of P302.23 million. — Revin Mikhael D. Ochave