PHILIPPINE SHARES continued to fall on Tuesday as investors reacted to the historic drop in oil prices to new lows overnight.
The 30-member Philippine Stock Exchange index (PSEi) lost 141.40 points or 2.46% to close at 5,592.25 on Tuesday. The broader all shares index fell 84.16 points or 2.42% to 3,389.74.
“Market is down…due to the downward spiral of oil price which may cause bankruptcy of highly-leveraged oil producing nations wherein their economies mainly rely on oil,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message yesterday.
United States oil prices crashed to negative territory on Monday as the global demand dropped sharply due to limitations on mobility caused by the coronavirus disease 2019 (COVID-19) pandemic.
Mr. Pangan said oil’s negative effect on the equities markets may continue for the rest of the week if Russia and Saudi Arabia will also keep flooding the global oil supply.
US stocks declined on Monday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices fell 2.44%, 1.79% and 1.03%, respectively. Asian markets were also sour on Tuesday: Japan’s Nikkei 225 and Topix indices dropped 1.97% and 1.15%, respectively, South Korea’s Kospi index fell 1.00%, and China’s Shanghai Shenzhen CSI 300 index slipped 1.18%.
For Timson Securities, Inc. Trader Darren T. Pangan, the drop in the local bourse is also still attributable to worries of the COVID-19 pandemic. “[P]rofit taking may have ensued as investors take a breather to assess the COVID-19 pandemic situation in the country,” he said.
As of Monday afternoon, COVID-19 cases in the Philippines reached 6,259 people. Deaths hit 428 individuals while 613 have recovered.
“The PSEi broke down from the 5,600… If it continues to trade lower than 5,500 [today], then next support is at 5,300. Otherwise, resistance remains at the 6,000 area,” Timson Securities’ Mr. Pangan said.
Sectoral indices at the PSE all closed in red territory on Tuesday. Mining and oil led with 138.30 points or 2.89% erased to 4,642.80. Industrials lost 190.26 points or 2.55% to 7,255.41; services let go 32.26 points or 2.48% to 1,266.97; property shaved off 71.25 points or 2.43% to 2,860.92; holding firms trimmed 134.22 points or 2.36% to 5,551.84; and financials dropped 27.22 points or 2.22% to 1,195.34.
Some 764.34 issues valued at P5.66 billion switched hands yesterday, higher from Monday’s 703.70 million issues worth P4.76 billion.
Decliners led advancers, 140 against 49, while 44 names ended unchanged.
Offshore investors fled the Philippine stock market, recording a net foreign selling of P763.35 million from Monday’s P628.75 million. — Denise A. Valdez