Stocks decline on lingering concerns overseas

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LOCAL STOCKS plunged on Wednesday, snapping their five-day climb, as the index continued to consolidate.

The 30-company Philippine Stock Exchange index (PSEi) dropped 1.25% or 109.05 points to close at 8,613.65, while the broader all-shares index also gave up 0.14% or 7.62 points today, Wednesday Feb. 21.

“Mainly the red flags coming overseas continue to dampen most markets, including ours. We see more of the yields in the US bond market continue to trek higher, which could translate to immediate rate hikes in the Fed (US Federal Reserve),” First Grade Finance, Inc. President and Managing Director Astrolito Romulo C. del Castillo said in a phone interview today.

Mr. Del Castillo added that oil prices, while dropping at the world market today, are likely to continue to inch higher.

“Again this is inflationary, not only in our own economy, but other economies as well,” he said.

On the domestic front, Mr. Del Castillo said no specific news is driving the market, which indicates that current movements remain to be a part of its consolidation.

Eagle Equities, Inc. President Joseph Y. Roxas also said that the market is still consolidating, noting the lack of news that may have prompted the index’s sudden drop.

Wall Street also ended lower on Tuesday, with the Dow Jones Industrial Average plummeting by 1.01% or 254.63 points to 24,964.75. The S&P 500 index was down 0.58% or 15.96 points to 2,716.26, while the Nasdaq Composite index was flat at 7,234.31, although still losing 0.07% or 5.16 points to 7,234.31.

Back home, four sectoral counters ended on a negative note. Property dropped 1.38% or 54.67 points to 3,903.49, followed by industrials that lost 1.29% or 148.84 points to 11,322.02. Holding firms dipped 1.08% or 96.12 points to 8,766.68, while the financials sub-index was down 1.03% or 23.24 points to 2,218.96.

Meanwhile, the mining and oil and services counters inched up, adding 2.63% or 316.51 points to 12,330.06 and 0.40% or 7.04 points to 1,745.44, respectively.

The market saw some 1.92 billion issues exchange hands for a value turnover of P9.53 billion, higher than the previous session’s turnover of P7.85 billion.

Decliners prevailed for the day at 128 versus the 82 that advanced and the 46 that remained unchanged.

Foreign investors maintained their selling position, widening net outflows to P516.38 million, against Tuesday’s P423.42 million.

“Volatility will remain. Other investors, specially the foreigners, they go to safer dollar investments. But there’s no reason to panic, it’s just consolidation of both markets,” First Grade Finance’s Mr. Del Castillo said.

Meanwhile, most Southeast Asian stock markets rose on Wednesday, tracking broader Asian peers.

Asia shares ex-Japan, which lost 0.20% in early trade, recovered to rise as much as 0.7%. — Arra B. Francia with Reuters