Stock Market

By Krista A. M. Montealegre, Senior Reporter

PSEi sinks below 7,400 on Greece, China sell-off

Posted on July 09, 2015

CONCERNS over the relentless sell-off in Chinese stocks and debt woes in Greece dragged the bellwether Philippine Stock Exchange index (PSEi) below the 7,400 mark yesterday, with analysts warning that the main index could fall even further to test last month’s low.

The benchmark PSEi joined a regional sell-off, slumping 79.22 points or 1.06% to close at 7,363.43, its worst finish since closing at 7,384.27 on June 10.

The wider all-shares index gave up 45.56 points or 1.07% to 4,214.14.
“Little room for optimism remained as investors across the Asia-Pacific region rushed toward the exits on concerns over the persisting sell-off in Chinese markets,” Jason T. Escartin, investment analyst at online brokerage, said in an e-mail.

China’s shares continues to fall, with the Shanghai Composite wiping out more than 30% of its value from its peak in June despite policy interventions by the government.

“Greece remains to be the biggest thorn -- seemingly a knife that has been impaled into investors’ collective hearts. A crucial meeting of European Union (EU)leaders takes place this Sunday whence the fate of Greece may be known,” Justino B. Calaycay, Jr., analyst at Accord Capital Equities Corp., said in a report.

At the end of the emergency euro zone summit in Brussels, the Greek government was given until Friday to submit a detailed reform proposal.

EU officials will then examine the plan in a crucial summit on Sunday and failure to reach a deal will make Athens’ exit from the euro zone more likely.

“The whole world is in a panic mode. Everybody is worrying about Greece and China,” Miko A. Sayo, trader at Angping & Associates Securities Inc., said in a phone interview.

All counters finished in the red. Mining and oil took a beating, shedding 308.39 points or 2.35% to 12,787.94
Industrials slid 213.75 points or 1.87% to 11,170.07; financials lost 20.44 points or 1.21% to 1,663.34; and holding firms gave up 63.97 points or 0.96% to 6,594.33.

Likewise, services tumbled 13.75 points or 0.66% to 2,043.95; and property dipped 6.59 points or 0.22% to 2,985.97.

Value turnover improved to P7.98 billion after 19.38 billion shares changed hands, from P6.55 billion in the previous session.

Losers dominated gainers, 130 to 46, while 40 issues were unchanged.

Net foreign selling was logged at P888.19 million, a reversal of Tuesday’s net buying worth P92.48 million.

“The general market is plunging and the market may test its recent low of 7,272.36 [on June 9]. That might happen as early as [today],” Angping & Associates’ Mr. Sayo said.

“Investors should stay on the sidelines and wait for the market to stabilize before getting in.”