By Arra B. Francia, Reporter
LOCAL EQUITIES slumped on Monday as investors remained cautious given inflationary pressures on the Philippine economy.
The bellwether Philippine Stock Exchange index (PSEi) fell 0.39% or 27.38 points to close at 7,050.82. The broader all-shares index likewise went down 0.36% or 15.52 points to 4,347.84.
“The market right now is still absorbing all these economic situations: interest rates, inflation, peso-dollar weakness, that is right now what is being problematic to the market and investors are concerned how they can see inflation improve in the coming months,” Summit Securities, Inc. President Harry G. Liu said in a phone interview yesterday.
On a technical note, Mr. Liu said the main index has a support level of 6,950, indicating that it could fall closer to its 52-week low of 6,923.67.
“We have been a bit oversold, the volume is thin. So there’s pressure to rally up, but if it rallies up, that would be very positive. So right now that’s what the investing public’s watching out for,” he explained.
The PSEi tracked the negative performance of indices overseas as the Dow Jones Industrial Average declined 0.68% or 180.43 points to 26,447.05 on Friday. The S&P 500 index also shed 0.55% or 16.04 points to 2,885.57, while the Nasdaq Composite index also plunged 1.16% or 91.06 points to 7,788.45.
Regional indices were also in negative territory on Monday, as investors prepared for the reopening of Chinese markets after last week’s holiday.
Regina Capital Development Corp. Managing Director Luis A. Limlingan attributed the decline to the People’s Bank of China’s (PBoC) reduction of its reserve requirement ratio (RRR) by an unexpected 100 basis points starting Oct. 15.
“Philippine shares started off on a negative note as the PBoC cut RRR unexpectedly… The most recent cut could suggest a higher priority of stabilizing domestic growth amid notable escalation in US-China confrontation after US Vice-President Pence’s speech on Oct. 4,” Mr. Limlingan said in a mobile message.
Back home, four sectoral indices declined, while two managed to increase. Industrials slipped 0.7% or 73.25 points to 10,331.90; holding firms dropped 0.51% or 35.24 points to 6,916.22; property shed 0.27% or 9.52 points to 3,478.45; while financials dipped 0.1% or 1.51 points to 1,573.45.
Meanwhile, mining and oil jumped 1.21% or 104.52 points to 8,757.19, and services rose 0.23% or 3.51 points to 1,507.34.
Decliners outpaced advancers, 115 to 71, while 56 names remained unchanged.
Some 769.20 million issues switched hands valued at P4 billion, falling from the previous session’s P4.08-billion turnover.
Foreign investors continued their selling spree, recording net sales of P527.90 million, albeit lower than Friday’s P885.37 million.