Stocks fall as manufacturing PMI drops in Aug.

SHARES declined on last-minute profit taking after manufacturing activity in the country dropped last month as strict lockdown restrictions were reimposed amid a surge in coronavirus disease 2019 (COVID-19) cases.

The benchmark Philippine Stock Exchange index (PSEi) dropped 69.50 points or 1.01% to close at 6,785.94 on Wednesday, while the all shares index lost 10.32 points or 0.24% to end at 4,215.26.

“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,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.

“The large contraction in factory output according to the Philippines’ purchasing managers’ index (PMI) may have been a factor for lightening positions,” he added. “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.”

Manufacturing activity in the country contracted in August, sinking to its lowest level in 15 months, as the reimposition of strict lockdown measures caused sluggish demand and forced factories and businesses to halt operations, IHS Markit reported on Wednesday.

IHS Markit said the Philippines Manufacturing PMI fell to 46.4 last month from 50.4 in July to again fall below the 50 neutral mark that separates contraction from expansion due to a “renewed contraction in operating conditions” in the sector.

“The local market ended lower along with some Asian markets, as investors weigh carefully the ongoing spread of the Delta variant across the globe, against the pace of the local government’s vaccination program,” Timson Securities, Inc. trader Darren Blaine T. Pangan said in a separate Viber message.

Most sectoral indices declined on Wednesday except for mining and oil, which gained 70.25 points or 0.76% to finish at 9,295.23, and financials, which went up by 9.84 points or 0.68% to 1,437.55.

Meanwhile, property dropped 52.22 points or 1.68% to 3,042.76; holding firms shed 97.26 points or 1.41% to close at 6,778.54; industrials declined by 64.81 points or 0.64% to 9,985.12; and services inched down by 9.32 points or 0.52% to 1,764.29.

Value turnover decreased to P8.82 billion on Wednesday with 2.02 billion shares switching hands, from the P14.85 billion with 2.92 billion issues traded the previous day.

Advancers narrowly beat decliners, 101 against 97, while 41 names closed unchanged.

Foreigners turned sellers, logging P30.61 million in net outflows on Wednesday, from the P306.96 million in net purchases recorded on Tuesday.

“Support may be placed at 6,590, while immediate resistance may be drawn at the 6,900 level,” Timson Securities’ Mr. Pangan said. — Keren Concepcion G. Valmonte

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