Index recovers but gains limited

MANILA, Philippines — The stock market yesterday recovered from the previous day’s losses after the government announced the extension of current quarantine restrictions, deferring a hard lockdown as suggested by local executives and business groups.

The benchmark Philippine Stock Exchange index or PSEi closed at 6,496.53, up 23.50 points or 0.36 percent while the broader All Shares gauge finished at 4,042.03, up 31.94 points or 0.80 percent.

“The local market rose but gains were kept in check on possibility of stricter restrictions. Quarantine measures for NCR were maintained for now despite the threat of the Delta variant,” AB Capital Securities said in a commentary.

All subsectors finished in positive territory as well, with mining and oil recording the biggest gains.

Total value turnover, however, remained thin at P4.821 billion. Market breadth was positive, 109 to 70, while 54 issues were unchanged.

Net foreign selling persisted for the fourth straight session with P466 million.

“Stock prices climbed higher after quarantine restrictions for the next two weeks were announced. Metro Manila remains under current restrictions despite the calls for stricter measures to curb the potential spike in cases, which most investors were also anticipating,” Chris Mangun of AAA Southeast Equities said.

The government announced late Wednesday that current quarantine restrictions would be extended for two weeks but not a hard lockdown as recommended by OCTA Research along with Metro Manila mayors and business chambers.

OCTA recommended a hard lockdown to contain the fast-spreading COVID-19 Delta variant.

However, Mangun said  investors are still generally concerned that a stricter lockdown can be enforced in the next two weeks or even sooner if the health situation deteriorates rapidly.

“Prices did not move higher because of a surge in demand from optimistic investors, but rather due to the reduced selling pressure from panicking shareholders which have been driving the market lower over the last week,” he said.

Trading volumes have increased slightly, although a lot of investors will still choose to be on the sidelines because of the uncertainty.

Moving forward, he said, the PSEi may continue trading at around the 6,500 level.