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Stocks drop as Metro Manila remains on lockdown

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PSE BGC bells

LOCAL SHARES retreated on Wednesday as investors assessed the economic impact of the government’s decision to keep the National Capital Region on lockdown for another two weeks.

The bellwether Philippine Stock Exchange index (PSEi) fell 25.42 points or 0.45% to close at 5,626.25 yesterday. The broader all shares index shed 15.26 points or 0.44% to 3,399.98.

“The market ended lower after investors priced in the economic impact of the government’s decision to still place major cities under lockdown measures until the end of the month,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message.

He noted the extension of the quarantine in these cities would mean a majority of the second quarter, or two out of three months, would account for the period when the economy is mostly asleep.

The government announced on Tuesday that Metro Manila, Laguna and Cebu City would remain under enhanced community quarantine (ECQ) until May 31, the third time it extended the ECQ from its original April 13 deadline.

This makes the Philippines one of the countries in the world with the longest lockdown emerging from the coronavirus disease 2019 (COVID-19) pandemic, Reuters noted in a report.

But compared to how it was two months ago, the government has relaxed the quarantine measures in other provinces to a general community quarantine (GCQ). It means these areas will be allowed to operate with a bigger — but still not 100% — workforce capacity.

“On a positive note, if the areas now placed under GCQ would turn out to be successful, then cities currently under modified ECQ may follow suit in the coming weeks,” Mr. Pangan said.

Five of six sectoral indices at the PSE closed lower on Wednesday. Mining and oil dropped 59.08 points or 1.28% to 4,548.88; financials lost 10.39 points or 0.88% to 1,162.77; services shaved off 10.28 points or 0.77% to 1,310.79; property trimmed 21.61 points or 0.76% to 2,818.09; and holding firms slid 10.50 points or 0.18% to 5,594.91.

Industrials was the only sub-sector that gained, closing the session up 9.69 points or 0.12% to 7,548.71.

Value turnover stood at P4.79 billion, down from P5.37 billion in the previous day. Some 422.90million issues switched hands.

Decliners outran advancers, 111 against 64, while 48 names ended unchanged.

Net foreign selling was trimmed to P394.37 million yesterday from P968.61 million on Tuesday.

“With the market still trading sideways, nearest support still sits at the 5,500 area, while closes resistance may be pegged at 6,000,” Mr. Pangan said.

Meanwhile, Wall Street’s three major averages closed around their session lows overnight. The Dow Jones Industrial Average fell 457.21 points or 1.89%, to 23,764.78; the S&P 500 lost 60.2 points or 2.05%, to 2,870.12; and the Nasdaq Composite dropped 189.79 points or 2.06% to 9,002.55. — Denise A. Valdez with Reuters





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