The local stock market declined due to weaker factory output In August as a result of stricter lockdown measures.
The main index dropped 69.5 points or 1.01 percent to close at 6,785.94 although the Financials and Mining and Oil counters managed to hold their ground even as the Property sector led the retreat.
Volume dropped but remained hefty at 2.02 billion shares worth P8.82 billion as gainers edged out losers 101 to 97 with 41 unchanged.
“Philippine shares took a breather from the last trading day of Aug on the back of lower-than-expected Chicago PMI (66.8) and Consumer confidence (113.8) data,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
He added that, “Here at home, factory activity in the Philippines contracted in August, with the IHS Markit Manufacturing PMI reading 46.40 for the period. This is down from July's 50.40 and is also surprisingly lower than the Aug 2020 reading of 47.30, which may have pulled sentiment today."
Limlingan noted that the country's capital was put under the strictest form of lockdown (ECQ) for two weeks in August, which likely hampered manufacturing activity.
AAA Equities Head of Research Chris Mangun said “The PSEi gave up its gains from the day before on massive last-minute selling pressure. The price momentum of blue-chip issues was the opposite of the previous session.”
He said “The large contraction in factory output according to the Philippines' purchasing managers’ index (PMI) may have been a factor for lightening positions.”
“The large number of cases from the greater Metro Manila areas of Cavite, Laguna and Bulacan which is where a lot of manufacturing facilities are located, could be the reason for the perceived slump in factory output,” said Mangun.
Philstocks Financial Senior Supervisor for Research Japhet Tantiangco said “The local market declined amid COVID-19 worries. This came as the World Health Organization confirms that the Delta variant is now the dominant strain in the Philippines and that community transmission of the said variant is already happening in the country.”