Bourse moves into oversold level

It is driven by costly building materials and shortages of labor and land

Shares of stocks continued to be sold down with many issues already hitting or approaching oversold levels triggered by the spread of the Delta variant.

The World Health Organization reported that the global death toll and cases are rising anew after a period of decline.

Meanwhile, the US housing market is signaling some supply issues near-term as building permits sink to an eight-month low, according to Regina Capital Development Corp. managing director Luis Limlingan.

“It is driven by costly building materials and shortages of labor and land. The report from the Commerce Department also suggests that the elevated prices of houses and bidding wars could persist for a while,” it noted.

The Treasury yields’ climb also soothed some concerns that a new wave of cases would slow down the economic recovery.

The Philippine Stock Exchange index settled at 6,476.21, or 110.99 points down on volume of trades of 91,996 shares valued at P5.316 billion.

More short-term weakness

COL Chief Technical Analyst Juanis Barredo highlighted that weakened technicals could allow for more weakness into the short-term. As pointed out earlier, a drop below the 6,672 to 6,606 support zones could force the recalibration of the short-term corrective assumptions towards 6,500 or even 6,350.

“Doing so would lengthen or widen the expected consolidation. What we also have to consider is that other markets moving to correct, or to widen ongoing corrections, could also send ripple effects to us to do more of the same,” he added.

Bargain-buyers joined their US and European counterparts Wednesday to fuel a rebound in most Asian markets following two days of selling, though optimism over the global economy and concerns about the fast-spreading Delta variant continue to cause volatility.

Investor confidence, built on months of vaccinations, and vast government and central bank support, has been knocked in recent weeks by surging infections around the world that have forced new lockdowns and containment measures while putting the global recovery at risk.

That has culminated in big losses for equity markets, which have been sitting at record or all-time highs, as dealers shifted into havens such as Treasuries, gold and the yen.

RACHEN SAGEAMSAK/XINHUA Been there Sparsely-crowded street is found in Bangkok, Thailand after it announced an expansion of restrictive measures that include travel curbs, a night-time curfew and shopping mall closures to cover three more provinces as its daily Covid-19 case tally surged sharply.