LOCAL SHARES plunged for the fourth straight session on Wednesday, dragged by news on how the US-China trade war has hit the United States’ manufacturing sector.
The benchmark Philippine Stock Exchange index (PSEi) plummeted 1.66% or 129.18 points to close at 7,610.68 yesterday, while the broader all-shares index likewise dropped 1.09% or 51.36 points to 4,635.68.
“Needless to say it was a bloodbath for the PSEi having been plagued by a drop in US markets last night, as well as the persistent net foreign selling,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail on Wednesday.
Wall Street indices ended in the red on Tuesday, with the Dow Jones Industrial Average down by 1.28% or 343.79 points to 26,573.04. The S&P 500 index slumped 1.23% or 36.49 points to 2,940.25, while the Nasdaq Composite index declined 1.13% or 90.65 points to 7,908.68.
“With US markets down on weak factory data indicative of global economic slowdown, this cascaded to most of the regional markets including the Philippines as foreign investors continued its selling in the amount of more than P497 million,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
US manufacturing activity tumbled to a more than 10-year low in September as lingering trade tensions weighed on exports, further heightening financial market fears of a sharp slowdown in economic growth in the third quarter.
The Institute for Supply Management said its index of national factory activity dropped 1.3 points to a reading of 47.8 last month, the lowest level since June 2009, when the Great Recession was ending. A reading below 50 indicates contraction in the manufacturing sector, which accounts for about 11% of the US economy.
Back home, all sectoral indices ended in negative territory, led by industrials which fell 1.7% or 178.05 points to 10,254.77.
Financials lost 1.68% or 30.27 points to 1,762.17; property shed 1.65% or 67.04 points to 3,984.62; services went down 1.64% or 25.01 points to 1,492.89; holding firms declined 1.32% or 101.16 points to 7,530.13; while mining and oil slipped 0.58% or 51.35 points to close Wednesday’s session at 8,673.32.
Some 453.98 million issues switched hands valued at P6.14 billion, an improvement from the previous session’s P5.45-billion turnover.
Decliners beat advancers, 110 to 80, while 46 names were unchanged.
Net foreign outflows persisted for the sixth consecutive session at P497.98 million, albeit lower than Tuesday’s P592.65 million.
“With the index’s close today, it may have effectively broken down its initial support area at 7,620 (which was the low last August). More confirmation on whether or not the downward movement will continue is needed however, especially since relative strength index is already oversold,” Papa Securities’ Mr. Perez said on Wednesday. — Arra B. Francia with Reuters