PSEi drops to 6,900 levels due to Omicron concerns

THE MAIN INDEX slumped on Wednesday amid concerns about the effectiveness of vaccines against the new 2019 variant of Coronavirus Disease (COVID-19) and the government’s pandemic response.

The Reference Index of the Philippine Stock Exchange (PSEi) fell 253.82 points, or 3.52%, on Wednesday to close at 6,947.06, while the broader all-shares index fell 103.75 points, or 2.70%, to 3,734.38 rise.

“PSEi declined amid ongoing concerns about the Omicron coronavirus variant, particularly as much is known about and whether existing vaccines and pills are still effective, which is a source of uncertainty for the market,” said Rizal Commercial Banking Corp. (RCBC) said chief economist Michael L. Ricafort in a Viber message.

Moderna, Inc. chief executive Stéphane Bancel said Tuesday that the current vaccines may not be effective against Omicron, the new variant of COVID-19, Reuters reported.

“On top of the concerns is Bloomberg’s COVID Resilience Index, on which the Philippines remained at the lower end,” said Japhet Louis O. Tantiangco, senior research and engagement supervisor at Philstocks Financial, Inc., in a Viber message.

The Philippines remained the worst place during the pandemic for the third straight month in the latest Bloomberg COVID-19 resilience ranking released on Tuesday, followed by neighbors Indonesia, Vietnam and Malaysia.

“In addition, investors reacted to recent statements by the US Federal Reserve Chairman Jerome Powell to the Senate Banking Committee in which [he] said the central bank could accelerate its tapering process to end earlier than previously telegraphed amid mounting inflationary pressures, “Luis A. Limlingan, director of sales at Regina Capital Development Corp., said in a Viber message.

High inflation, stalled workforce growth and the strong economy are expected to last through mid-2022 as US central bankers discuss in December whether to end their bond purchases earlier than expected, Reuters reported.

All industry indices fell on Wednesday. Real estate fell 165.26% or 5.01% to close at 3,131.87; Services fell 73.71 points, or 3.71%, to 1,912.77 points; Holding companies fell 226.17 points, or 3.26%, to 6,706.67; Industrials lost 246.72 points, or 2.36%, to 10,193.03; Financials fell 37.12 points, or 2.36%, to 1,525.73 points; Mining and Oil declined 185.19 points, or 1.96%, to close at 9,255.37 points.

Values ​​fell to 14.43 billion pesos on 1.37 billion shares traded Wednesday, from 28.02 billion pesos on 2 billion issues that changed hands on Monday.

Rejecters beat promoters, 165 versus 40, while 42 names closed unchanged.

Foreigners became sellers again, seeing net outflows of $ 1.25 billion on Wednesday.

“Next key support at 6,730-6,870 to keep the underlying uptrend of the past four months intact,” said RCBC’s Ricafort. – MC Lucenio with Reuters

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