Local stocks take a dive as virus surges

Local shares plunged to a new low on Friday over concerns of more stringent government measures in response to the newest surge in Covid-19 cases.

The Philippine Stock Exchange index (PSEi) slipped by 2.94 percent or 194.75 points to an intraday low of 6,436.10 while the broader All Shares fell by 2.39 percent or 95.68 points to end at 3,909.41.

PSEi’s almost 3-percent slump is its second biggest so far this year, following the 3.49-percent last January 29 that was triggered by the exodus of foreign funds and growing economic recovery concerns.

Philstocks Financial Inc. research associate Claire Alviar said negative sentiment spilled over to the market on the back of new restrictions on businesses to arrest the rise in Covid-19 cases.

Palace spokesman Harry Roque Jr. on Friday said the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) ordered the temporary closure of some nonessential businesses in areas in GCQ or general community quarantine until April 4.

The directive covers driving schools, traditional cinemas, video and interactive game arcades, libraries, archives, museums, cultural centers, limited social events at Department of Tourism (DoT)-accredited establishments, and limited tourist attractions.

Roque also said the task force reduced the venue capacity of meetings, incentives, conferences and exhibitions events, religious gatherings, dine-in restaurants, cafés, and personal care services.

Alviar said the new measures “are expected to harm the economic recovery of the Philippines.”

He said the market was also reacting to the downturn in US stocks overnight.

Wall Street was in the red as the Dow Jones lost 0.46 percent; the S&P, 500 1.48 percent; and the Nasdaq, 3.02 percent.

Regina Capital Development Corp. Managing Director Luis Limlingan said the gloom from Wall Street’s decline pervaded even the local shares.

“[S]entiment spilled over as US equities ended lower yesterday as the rise in treasury yields prompted investors to sell tech stocks,” Limlingan said.

He added that the funds also realigned with the latest FTSE rebalancing decision.

The local sectors took a heavy beating, with the property index ending up the biggest loser with 4.48 percent.

Total volume turnover was at 3.53 billion shares valued at P10.41 billion.

Losers outpaced winners at 157 to 64, while 35 securities were unchanged.