LOCAL STOCKS fell on Wednesday as investors fled global markets following geopolitical tensions in the Middle East.
The bellwether Philippine Stock Exchange index (PSEi) shed 0.29% or 22.30 points to close at 7,555.27 yesterday.
The broader all-shares index also dipped 0.19% or 8.84 points to 4,620.49.
“Local equities were affected by (United States) Pres. (Donald J.) Trump’s decision to pull the US out of the Iran nuclear deal as investors took another temporary flight to safety to dollar assets on fresh Mideast geopolitical tension fears and the negative implication on earnings for affected firms worldwide,” PCCI Securities Brokers Corp. Research Head Joseph James F. Lago said in an e-mail.
Analysts noted this move will strain US’ longstanding alliances, disrupt oil markets and boost tensions in the Middle East.
Mr. Lago also noted that investors had gone bargain hunting in the morning given optimism ahead of first-quarter economic growth figures to be released on Thursday.
Overnight, the Dow Jones Industrial Average closed flat, adding only 0.01% or 2.89 points to 24,360.21. The S&P 500 index slipped 0.03% or 0.71 point to 2,671.92, while the Nasdaq Composite index went up 0.02% or 1.69 points to 7,266.90.
Mr. Trump’s announcement on Iran also dragged down most Asian indices, with Japan’s Nikkei 225 losing 0.44% to 22,408.88, and the Shanghai Composite index losing 0.08% to 3,158.81.
Back home, sectoral counters were split between gainers and losers. Financials gave up 1.37% or 26.02 points to 1,860.52. Services plunged 0.93% or 14.22 points to 1,510.72, while holding firms edged down 0.13% or 10.53 points lower to 7,600.17.
Meanwhile, industrials inched up 0.37% or 41.61 points to 11,096.08. Property gained 0.31% or 11.18 points to 3,593.21, while mining and oil added 0.12% or 12.29 points to 10,095.22.
The market saw thin trading for the day, with 1.21 billion issues switching hands valued at only P4.96 billion, much lower than the P7.23-billion turnover on Tuesday.
“Our muted value turnover of only P5.0B was really reflective of everyone’s waiting for GDP (gross domestic product) data [today] at 10 a.m., as well as the BSP’s (Bangko Sentral ng Pilipinas) much awaited decision on interest rates at 4 p.m. We hope that GDP beats the 6.8% consensus to give the market its much needed boost,” Papa Securities Corp. trader Gabriel F. Perez said in an e-mail.
Decliners trumped advancers, 113 to 73, while 59 stocks remained unchanged. Foreign investors remained on selling mode, resulting in net sales of P638.33 million, higher than the P225.77 million recorded in the previous session.
PCCI Securities’ Mr. Lago said the local central bank might implement a slight tightening or raise its benchmark rates in a gradual manner in light of rising inflation.
“If it adjusts its policy rates, it will be on a gradual path so that it has room for all of its other tools when inflation pressures eases late in the year or in 2019,” Mr. Lago said. — Arra B. Francia