THE MAIN INDEX closed flat on Tuesday as renewed tensions between the United States and China affected investor sentiment.
The 30-member Philippine Stock Exchange index (PSEi) inched up by 0.24 point to 6,172.81, while the broader all shares index shed 7.90 points or 0.21% to 3,625.85.
The index mostly traded in red territory during the day and hit a low of 6,135.29. Last-minute bargain hunters lifted it to a peak of 6,178.68 before settling at 6,172.81 at the close.
“Philippine shares finished flat after the Trump administration rejected China’s expansive claims in the South China Sea, escalating tensions with Beijing on yet another front,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
On Monday, US Secretary of State Mike Pompeo said Beijing’s claims on most of South China Sea are “completely unlawful,” adding “the world will not allow Beijing to treat the South China Sea as its maritime empire,” news wires reported.
Reuters reported that the Chinese embassy in Washington has called the comments “completely unjustified” and is “inciting confrontation in the region.”
For Philstocks Financial, Inc. Research Associate Claire T. Alviar, another factor for the PSEi’s decline was the lack of a strong catalyst as the country waits for the government’s decision on quarantine measures in Metro Manila.
“Investors await the decision whether the government would implement stricter guidelines or more relaxed measures. The situation makes this uncertain where COVID-19 cases are growing, while economy is weakening,” she said in a text message.
Ms. Alviar said the uncertainty about what lies ahead has resulted in weaker trading at the PSE for the past four days. She said average value turnover for the period stands at around P5 billion, lower than the year-to-date average of P6.6 billion.
Value turnover on Tuesday was at P5.13 billion with 5.80 billion issues switching hands, higher than Monday’s P4.64 billion with 907.56 million issues.
“Traders’ current focus is on the small cap companies given the dim earnings outlook, but investors should be cautious riding on this momentum which are mostly technical driven and almost entirely speculation,” Ms. Alviar said.
Most sectoral indices were losers at the close of the session: mining and oil dropped 123.77 points or 2.29% to 5,277.72; industrials lost 138.90 points or 1.8% to 7,550.99; services went down 14.59 points or 1.01% to 1,429.23; and financials gave up 10.98 points or 0.9% to 1,198.71.
Meanwhile, property gained 57.01 points or 1.92% to 3,014.22 and holding firms added 3.54 points or 0.05% to 6,486.74.
Decliners outnumbered advancers, 126 against 87, while 29 names ended unchanged.
Net outflows narrowed to P60.12 million on Tuesday from the previous day’s P849.32 million. — Denise A. Valdez