Philippine stock index falls over 3% amid surge in infections

Philippine stocks fell the most in Asia, sending the benchmark index below 6,500 as investors dumped the nation’s equities amid escalating daily coronavirus infections.

“Investors are essentially liquidating their holdings” as the renewed spike in COVID cases and renewed mobility restrictions could derail economic recovery prospects, said Lex Azurin, an analyst at AB Capital Securities.

The Philippine Stock Exchange Index lost as much as 3.6%, it’s steepest drop since August, before paring its drop to trade at 6,530.00 as of 12 p.m. local time. All except one of 30 index components declined, with Alliance Global Group Inc, Metro Pacific Investments Corp., San Miguel Corp. and Robinsons Land Corp., each dipping as much as 6%.

The surge in COVID-19 cases in the Philippines, with the second-highest infection count in Southeast Asia, comes after the nation was one of the region’s last to begin inoculations. In contrast, the recent outbreak that’s led to hundreds being quarantined in Hong Kong — where a vaccination program is well underway — hasn’t triggered a similar sell-off.

Philippine COVID-19 cases surged in the last three days, adding 4,817 cases a day through Sunday, and marking the nation’s highest three-day average of new infections. The increase puts a clouds over the strength of Philippine economic recovery.

The Philippine stock index could fall to as low as 6,400 near term depending on the magnitude of daily infections as this could prompt a return to stricter virus curbs, Azurin said. — Bloomberg