Stocks pulled down by US rate hike fears
By Arra B. Francia
Stocks bled on Tuesday, March 20, pulled down by fears on a rate hike by the United States Federal Reserve accompanied by Mitsubishi Corp.’s sale of a significant stake in Ayala Corp. (AC).
The main index fell back to the 8,000 level after losing 2.14% or 175.94 points on Tuesday, closing at 8,059.60. The bloodbath saw the index hit an intraday low of 8,015.49. The broader all-shares index meanwhile also gave up 2.03% or 100.31 points to 4,848.49.
This officially places the index at a correction, as it has now fallen 12% from its previous high of 9,058.62 last.
“I think the heavy sell-off today was driven by AC (Ayala Corp.) after Mitsubishi sold a significant stake at P934 per share,” IB Gimenez Securities, Inc. Research Head Joylin F. Telagen said in a text message.
Mitsubishi reportedly sold around 6.2 million shares in AC earlier in the day at a 4.6-7.5% discount, equivalent to around a percent of its shareholdings in the conglomerate. AC was the second most actively traded stock for the day, losing 7.23% or P73 to close at P937 each.
Prior to the sale, Mitsubishi owned 10.17% of AC, 48.96% is owned by Mermac, Inc., while the rest are held by the public.
Ms. Telagen also attributed the sell-off as investors being keeping a cautious tone ahead of the US Fed’s policy meeting from March 20 to 21.
“All eyes are on the results of the US Federal Reserve’s two-day policy meeting. Locally, investors may be waiting for the index to hit its low ahead of the BSP’s monetary policy meeting on March 22. We may see some let up after the BSP sets policy direction,” Papa Securities Corp. trader Gabriel F. Perez said in an email.
All sectoral indices were down locally, with services incurring the biggest loss at 2.79% or 47.99 points to 1,671.88. Holding firms dropped 2.04% or 167.71 points to 8,040.35; property shed 1.97% or 74.05 points to 3,635.50; industrial dipped 1.96% or 225.37 points to 11,275.35; financials declined 1.94% or 41.70 points to 2,110.86; while mining and oil closed 1.88% or 201.23 points lower to 10,501.61.
