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Stocks fall again; Converge drops

The stock market declined Wednesday on another bout of profit taking, weighed down by concerns over the surge in coronavirus cases across the United States and Europe.

The Philippine Stock Exchange Index fell 37.29 points, or 0.6 percent, to 6,377.79 on a value turnover of P6.8 billion. Gainers, however, beat losers, 112 to 89, with 46 issues unchanged.

Converge Information and Communications Technology Solutions Inc. slumped 4.7 percent to P14.50, its third straight day of decline since debuting in the market Monday, while Semirara Mining and Power Corp. dropped 7.9 percent to P10.74.

SM Prime Holdings Inc. of the Sy Group declined 3 percent to P32.50, but First Gen Corp. of the Lopez Group surged 11 percent to P29.30.

The rest of Asian markets, meanwhile, fell, while investors have essentially given up on the chances of a new stimulus out of Washington.

With US lawmakers unlikely to agree any new rescue package before Tuesday’s election, analysts said the new wave of virus infections and lingering uncertainty over the vote mean equities will face a wobbly few days.

European leaders are being forced to revert to strict, economically damaging measures to control the spread of the virus as some record a spike in deaths and new cases.

And with the United States also suffering a Covid-19 resurgence, there is a fear that the already-stuttering global economic recovery will be thrown off track. Some experts have warned of a double-dip recession.

“Covid case counts and hospitalizations continue to rise—these will continue to be closely watched as investors gauge the likelihood of more stringent mitigation measures,” said StoneX strategist Yousef Abbasi.

The impact of this year’s lockdowns and travel restrictions was laid bare Tuesday as the World Tourism Organization said tourism had collapsed 70 percent, leading to a $730-billion loss in revenues, while the UN’s trade body said foreign direct investment was likely to slump 40 percent.

The Dow and S&P 500 both fell again, though the Nasdaq edged up as traders bet tech firms will benefit from people being forced to stay home.

The retreat extended into Asia, though traders pared or reversed morning losses as the day wore on.

Tokyo, Hong Kong, Mumbai, Taipei and Singapore were in the red, but Shanghai, Seoul and Wellington rose.

Sydney was lifted as Australia’s second-biggest city Melbourne enjoyed its first day of being open again after a months-long lockdown. 

London lost more than one percent at the open, while Paris and Frankfurt were down almost two percent.

Tai Hui at JP Morgan Asset Management said the surge in infections in the US and Europe had been expected in the northern hemisphere winter, adding it “should push investors to take a more defensive position for the time being. In the very short term, the US elections would reinforce this conservative bias.”

However, no matter the outcome, the result of the vote “should provide the certainty that investors are constantly looking for.” With AFP

Topics: Stock Market , Philippine Stock Market , PSE , Philippine Stock Exchange Index , PSEi , global stock market , Converge Information and Communications Technology Solutions Inc.
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