(Bloomberg) -- Philippine stocks tumbled the most in more than a year on fears coronavirus infections will rise further and spur the government to extend a two-week lockdown affecting the capital and other areas.
The Philippine Stock Exchange Index plunged 3.6% to 6,320.19 at 1 p.m. in Manila, its lowest close in more than a year. Investors dumped key blue chips -- including SM Investments Corp. and unit SM Prime Holdings Inc. -- after the gauge had held a moderate decline for much of the day.
“I was expecting a downward movement, but not this drastic,” said Manny Cruz, strategist at Papa Securities. “The fear is infections will further escalate, raising prospects the lockdown will run longer.”
Philippine Stocks May Be Heading for Two Months of Pain: Chart
Philippine equities are the biggest losers among Asian national benchmarks over the past month after a surge in Covid-19 cases led the government to re-impose a strict lockdown for two weeks to contain the more infectious delta variant. New daily local infections reached 12,439 on Thursday, the second straight day that cases exceeded 12,000.
The market has also faced headwinds because of a rebalancing of the benchmark index due to take effect on Monday.
“The recomposition of the PSEi is also causing funds to rebalance, adding to the market volatility,” Cruz said.
Stocks may bounce back in the coming week unless the virus outlook deteriorates further, Cruz said. The PSEi is close to the 6,300 level that has attracted a “strong base of support” he said. “Still, any rebound would be limited between 6,500 and 6,600 as sentiment remains weak.”
Read: Philippine Lockdown Drags Stocks Toward Death-Cross Zone: Chart
©2021 Bloomberg L.P.