Local stocks decline after extended UK travel ban

PHILIPPINE shares ended in negative territory on Monday, the start of a short trading week, as investor sentiment was dampened by the extension of travel restrictions from the United Kingdom (UK) in efforts to limit the spread of a variant of the coronavirus disease 2019 (COVID-19).

The 30-member Philippine Stock Exchange index (PSEi) dropped 82.13 points or 1.14% to close at 7,122.25, while the broader all shares index fell 40.18 points or 0.93% to end at 4,254.37.

Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said the market retreated as investors considered the Philippine government’s decision to prolong the ban on all flights from the UK for another two weeks.

“Market participants may be digesting the recent developments over the new strain of COVID-19, thus urging most of them to stay cautious,” Mr. Pangan said in a mobile phone message.

On Saturday, President Rodrigo R. Duterte extended the travel ban in an effort to prevent the spread of the new COVID-19 strain. Passengers that came from or passed by the UK and other countries where the new strain was detected, such as Hong Kong, Singapore, Australia, and Japan are also ordered to undergo 14-day quarantine.

For AAA Southeast Equities, Inc. Research Head Christopher John Mangun, the market fell due to panic selling in anticipation of tighter lockdown restrictions as a result of the new COVID-19 strain.

“Once sellers stopped dumping at the lower prices, buyers came back in, pushing prices higher, and limiting losses for the day. It broke below its support at 7,200 and failed to recover back to this level,” Mr. Mangun said in an e-mail.

“The market’s early losses were not because of massive selling pressure, but the lack of buy posts as investors expected the drop and opted to pick up shares at lower prices,” he added.

On Monday, all sectoral indices at the PSE ended in negative territory at the end of trading day.

Financials declined 29.27 points or 1.99% to 1,438.69; holdings firms retreated 124.38 points or 1.67% to 7,323.69; industrials went down 69.21 points or 0.74% to 9,250.97; services shrank 10.16 points or 0.66% to 1,516.27; mining and oil decreased 50.16 points or 0.54% to 9,236.56; and property sank 7.94 points or 0.21% to 3,686.11.

Decliners bested advancers, 175 against 62, while 34 names ended unchanged.

Value turnover on Monday amounted to P8.14 billion with 60.55 billion issues switching hands, higher than the P6.94 billion with 29.39 billion shares during the previous trading session.

Net foreign selling declined to P98.26 million, against P695.96 million on Wednesday last week.

“Market support may be placed at 6,800, while nearest resistance may be drawn at the 7,300 level,” Mr. Pangan said. — Revin Mikhael D. Ochave

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