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PHL shares decline further as correction continues

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PHILSTAR/KJ ROSALES

SHARES FELL on Tuesday, continuing a downward trajectory, as the region provided no fresh leads for investors to trade on.

The bellwether Philippine Stock Exchange index (PSEi)plunged 1.54% or 119.11 points to 7,600.36 Tuesday, Apr. 24, while the broader all-shares index also lost 1.26% or 59.32 points to 4,617.77.

“Philippine markets continued to sell down as investors continued to stay on the sidelines without any catalysts from regional market,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

PCCI Securities Brokers Corp. Research Head Joseph James F. Lago noted that this is a continuation of the market’s correction that has been in place since Jan. 30.

“Rising global yields, particularly that of US Treasuries, have been the main culprit coupled with the domestic inflation that will certainly be at the 4+% range for the whole year given the short-term impact of the TRAIN (Tax Reform for Acceleration and Inclusion) law and the continued rise of crude prices,” Mr. Lago said in an e-mail.

The PCCI Securities analyst noted that there may be an impact on both the country’s economic growth and corporate profits with higher domestic rates.

Back home, all sectoral counters remained in negative territory, with property leading the decline with a 2.03% drop or 72.85 points to 3,514.84. Mining and oil declined 1.8% or 189.59 points to 10,343.13, followed by industrials which dropped 1.78% or 197.71 points to 10,878.89.

Financials fell by 1.44% or 28.75 points to 1,964.57; holding firms lost 1.19% or 91.10 points to 7,540.83; while services gave up 0.72% or 11.30 points to 1,552.84.

Some 2.3 billion issues valued at P6.53 billion switched hands, lower than Monday’s P5.48 billion.

Declining stocks prevailed for the day at 143 versus 68 that gained and 40 that remained flat.

Foreign investors were net sellers for the fourth consecutive day as they dumped a net P175.32 million worth of funds, although lower than the P308.2 million in net sales on Monday.

“At the current trajectory, the PSEi might test the 7,500 level within the short-term. With relative valuations much more attractive than what it was 3 months ago, a support might be found at this level,” Mr. Lago said.

Overseas, markets in the United States ended mixed. The Dow Jones Industrial Average dipped 0.06% or 14.25 points to 24,448.69. The S&P 500 index barely moved, adding 0.01% or 0.15 point to 2,670.29, while the Nasdaq Composite index lost 0.25% or 17.53 points to 7,128.60.

Meanwhile, most Southeast Asian stock markets came under pressure on Tuesday as concerns over US inflation and fiscal deficit pushed up treasury yields, stoking a sell-off in equities.

US bond prices have fallen for the past four days, pushing up the 10-year yield to 2.998%, its highest since January 2014. — A.B. Francia with Reuters