STOCKS fell on Wednesday on worries over the economy’s recovery prospects after data showed a worse-than-expected contraction in the first quarter, and with coronavirus disease 2019 (COVID-19) cases continuing to rise.
The Philippine Stock Exchange index (PSEi) lost 90.43 points or 1.42% to close at 6,236.40 on Wednesday, while the broader all shares index went down by 49.96 points or 1.27% to 3,858.
“With most Asian markets down on inflationary concerns, as well as COVID-19 outbreaks, local markets followed after a more than estimate contraction in GDP in the [first] quarter at 4.2%,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
Philstocks Financial, Inc. Research Associate Claire T. Alviar said the index declined after the country detected COVID-19 variants from India and after the MSCI index was rebalanced.
“There [was] deletion in the MSCI Global Standard Index and some companies were downgraded to [the] Small Cap Index which [provided] negative sentiment in the market as we may see further net foreign selling,” Ms. Alviar said in a Viber message.
The Philippine economy contracted more than expected in the first three months of the year, extending the recession to five straight quarters as the pandemic dragged on, the Philippine Statistics Authority reported on Tuesday.
GDP fell by an annual 4.2% in the quarter ending March, worse than the median decline of 2.6% in a BusinessWorld poll last week.
This marked five consecutive quarters of GDP decline, marking the longest recession since the Marcos era when economic output shrank for nine consecutive quarters from the fourth quarter of 1983 to the fourth quarter of 1985.
Meanwhile, the Health department said on Tuesday that at least two people in the country tested positive for the coronavirus disease variant first seen in India. Both patients were said to have recovered from the disease already.
Majority of sectoral indices declined on Wednesday except for financials, which gained 3.93 points or 0.28% to end at 1,403.64.
Meanwhile, mining and oil fell by 291.71 points or 3.07% to 9,199.46; property decreased by 85.38 points or 2.79% to 2,971.48; holding firms shaved off 107.27 points or 1.69% to at 6,231.75; services lost 17.99 points or 1.23% to finish at 1,442.25; and industrials went down by 31.44 points or 0.36% to 8,623.93.
Value turnover increased to P6.2 billion on Wednesday with 3.63 billion issues traded, from the P4.64 billion with 9.95 billion shares switching hands on Tuesday.
Decliners outnumbered advancers, 141 against 55, while 50 names closed unchanged.
Net foreign selling went up to P565.86 million on Wednesday from the P347.88 million logged on Tuesday.
Diversified Securities’ Mr. Pangan said he expects the PSE index to trade within the 6,130 to 6,500 range today. — Keren Concepcion G. Valmonte