STOCKS declined on Wednesday as investors remained worried about the Delta variant of the coronavirus disease 2019 (COVID-19) and after Fitch Ratings revised its outlook on six Philippine banks to “negative.”
The Philippine Stock Exchange index (PSEi) declined by 110.99 points or 1.68% to close at 6,476.21 on Wednesday, while the broader all shares index lost 53.55 points or 1.31% to end at 4,031.
“The PSEi fell…, failing to rebound despite a rally shown from the US,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a separate Viber message.
“Weakness prevailed likely because of a banking outlook downgrade by Fitch and worries investors have over the possible spread of the Delta variant of COVID that may lead to more lockdowns,” Mr. Barredo added.
“Philippine shares continued to be sold down with many issues already hitting or approaching oversold levels triggered by the spread of the Delta variant,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
President Rodrigo R. Duterte said in his public address on Monday night that the government may reconsider enforcing stricter mobility restrictions after the country logged new Delta variant cases.
The Health department last week reported that cases of the Delta variant of COVID-19 in the country stood at 35. Of these, 11 were locally acquired, while five were cases from returning overseas Filipinos. Eight of these cases are active.
Meanwhile, Fitch on Monday revised its rating outlook on six Philippine banks to “negative” from “stable.” These banks are Land Bank of the Philippines, Development Bank of the Philippines, Bank of the Philippine Islands, Philippine National Bank, BDO Unibank, Inc., and Metropolitan Bank & Trust Co.
The outlook cut means these banks’ ratings could be downgraded in the next 12-18 months.
All sectoral indices went down on Wednesday. Financials dropped by 43.82 points or 3.05% to 1,392.99; industrials shaved off 194.81 points or 2.08% to 9,145.80; holding firms lost 112.56 points or 1.71% to finish at 6,459.69; mining and oil declined by 160.53 points or 1.67% to 9,452.77; services shed 14.06 points or 0.9% to 1,543.67; and property went down by 18.63 points or 0.6% to close at 3,085.73.
Value turnover decreased to P5.9 billion with 1.60 billion shares switching hands on Wednesday, from the P6.54 billion with 2.11 billion issues logged on Monday.
Decliners beat advancers, 167 versus 45, while 41 names remained unchanged.
Net foreign selling increased to P572.26 million on Wednesday from the P362.2 million seen the previous trading day.
“The index sank below a critical 6,500 support zone and has 6,350 to 6,150 as its next levels to look [out] for,” COL Financial’s Mr. Barredo said, but noted the PSEi could rally soon. — Keren Concepcion G. Valmonte