Shares snap out of rally on higher COVID-19 infection rate

PSE Information Desk

Philippine stocks on Friday closed in the red a day after the country reported a record high coronavirus disease 2019 (COVID-19) infection rate and dampened investor sentiment.

The 30-member Philippine Stock Exchange index (PSEi) declined by 36.37 points or 0.55% to close at 6,544.63 on Friday, while the broader all shares index went down by 9.04 points or 0.22% to 3,967.79.

“Market went on profit taking [on Friday] as [a] new record high COVID-19 infection rate was reported [on Thursday. This] may prompt the government to maintain or apply stricter restrictions so as to contain the spread of the virus,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a Viber message.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a separate Viber message that negative sentiment “spilled over” after the country recorded its highest COVID-19 single-day tally.

The Health department reported a 16.1% COVID-19 infection rate on Thursday, logging an additional 8,773 cases. The daily tally brought the number of total COVID-19 infections in the country to over 693,000.

Juanis G. Barredo, chief technical analyst at COL Financial Group, Inc., said the market “corrected,” after three consecutive days of posting gains.

“Rallies in the previous days had come with sparse volumes and this still shows tenderness in demand,” Mr. Barredo said in a separate Viber message.

The sectoral indices were split on Friday. Holding firms decreased by 58.34 points or 0.87% to 6,605.40; financials fell by 10.55 points or 0.74% to finish at 1,401.64; and services declined by 9.23 points or 0.63% to 1,435.98.

Meanwhile, mining and oil improved by 177.22 points or 2.09% to 8,633.94; industrials rose by 19.67 points or 0.22% to 8,590.72; and property inched up by 3.43 points or 0.1% to close at 3,276.96.

Value turnover went down to P6.28 billion with 4.91 billion shares switching hands from P6.10 billion with 2.49 billion issues traded on the previous trading day. Advancers outperformed decliners, 101 against 92, while 49 names closed unchanged.

Net foreign selling declined to P724.71 million on Friday from the P783.51 million seen on Thursday.

COL Financial’s Mr. Barredo said the index still needs to “recoup” over its 6,700 to 6,800 resistance.

“Unless this happens, this rally could simply be temporary, part of its regular cascade within a reactive trend. Support is seen between 6,400 and 6,250,” he said. — Keren Concepcion G. Valmonte