Shares drop as investor optimism wanes on lack of leads

LOCAL shares ended lower on Friday as investor optimism was dampened on the lack of positive catalysts and the ongoing coronavirus disease 2019 (COVID-19) pandemic.

Continuing its decline for a sixth consecutive day, the 30-member Philippine Stock Exchange index (PSEi) dropped 94.46 points or 1.32% to close at 7,045.83, while the broader all-shares index fell 39.29 points or 0.91% to end at 4,261.69.

In a mobile phone message, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the local bourse ended lower due to a lack of positive catalysts.

“Optimistic expectations towards the local economy is seen to be waning amid the lack of a catalyst while COVID-19 concerns continue to weigh on sentiment,” Mr. Tantiangco said.

Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said the market declined, together with most Asian markets, as investors were concerned about the increase in COVID-19 cases in China.

Other Asian markets were in red territory at the close of trading at the local bourse. Japan’s Nikkei 225 and Topix indices, and Hong Kong’s Hang Seng index were all in a downward trend. Meanwhile, China’s CSI 300 index was in green territory as of press time.

According to Reuters, Beijing on Friday has launched mass COVID-19 testing in some areas while Shanghai was testing all hospital staff as China faces its worst outbreak of the disease since March.

Mainland China posted 103 new COVID-19 cases on Friday, lower than the 144 cases a day earlier.

“Locally, market breadth remained negative as traders chose to take profits from a few second and third liner issues which have been trending upward for the past few days,” Mr. Pangan said.

For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, the market ended lower as investors shifted their focus to the economic situation in the United States.

“Local shares were hammered down near the 7,000 psychological support as investors shifted their focus towards the US, where optimism picked up on plans of President Joe Biden to combat the pandemic,” Mr. Limlingan said in a mobile phone message.

Back home, property declined 58.49 points or 1.61% to 3,568.11; financials retreated 20.44 points or 1.39% to 1,449.12; holding firms shrank 97.28 points or 1.32% to 7,225.15; and services decreased 18.91 points or 1.21% to 1,536.13.

Meanwhile, mining and oil increased 71.62 points or 0.77% to 9,321.95, and industrials picked up 6.83 points or 0.07% to 9,175.1.

Decliners bested advancers, 117 against 104, while 39 names ended unchanged. Value turnover on Friday amounted to P11.39 billion, with 135.08 billion issues switching hands, lower than the P12.51 billion with 102.66 billion issues traded during the previous session.

Net foreign selling reached P1.42 billion, higher than the net outflows worth P995.96 million logged on Thursday.

“The bourse seems to have held the 7,000 support area this week as it coincidentally rests just around its simple moving average (SMA)-50 line. Nearest resistance still lies at the 7,300 level,” Mr. Pangan said. — Revin Mikhael D. Ochave

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