Stocks fall as Delta variants rise

SHARES could trade lower this week, with investors seen to remain cautious as the local transmission of the Delta variant of the 2019 coronavirus disease (COVID-19) dampens market sentiment.

The Philippine Stock Exchange Index (PSEi) fell 55.88 points or 0.85% to close Friday at 6,520.74, while the broader index for all stocks fell 36.43 points or 0.89% to finish. at 4,038.51.

Week after week, the whistleblower PSEi lost 173.09 points from its 6,693.83 close on July 16.

The local stock market plummeted… as the government once again tightens restrictions in Metro Manila and other provinces due to the Delta variant, said research associate Claire T. Alviar of Philstocks Financial, Inc. in a Viber post on Friday.

We think many investors are now sitting on the sidelines to monitor the COVID-19 cases and the government’s measures against the spread of the COVID-19, she added.

The government placed Metro Manila and the provinces of Ilocos Norte, Ilocos Sur, Davao de Oro and Davao del Norte under general community quarantine on Friday with increased restrictions until the end of the month to curb the spread of COVID-19.

The health department reported 17 new cases of the Delta variant on Saturday, including 12 local cases and one recurring overseas Philippine. The other four cases are still being verified. Three of these newly reported cases of Delta variants are said to be active, while 14 have recovered.

The country now has a total of 64 Delta variant cases.

The market is expected to trade on a downward trend this week as fears of the spread of the more transmissible Delta variant of COVID-19 are likely to impact investor sentiment.

If more confirmed local cases with the Delta variant are reported [this] week, then we may see heavy sell-offs in the market, Philstocks Financial, Inc. said. Senior Research Analyst Japhet Louis O. Tantiangco in a Viber post Saturday.

[This] is also expected to weigh in on the market, said Mr. Tantiangco. This is due to the expected economic losses from the imposition of relatively stricter measures against the production capacity of the largest contributor to our GDP (gross domestic product).

Mr. Tantiangco expects the benchmark index to trade around 6,400 to 6,600, noting that trading may remain apathetic.

Investors can continue to watch second-quarter corporate earnings for clues, he added.

Meanwhile, stock trader Aniceto K. Pangan of Diversified Securities, Inc. that the PSEi could move between 6,450 and 6,700.

The market will continue its volatility with a downward trend as infection rates increase with the pandemic virus, [coupled] as the government is doing ways to contain the spread of the virus through tougher measures, Mr Pangan said in a text message on Saturday. Keren Concepcion G. Valmonte