PHILIPPINE STOCKS dropped on Wednesday as investors pocketed their gains amid a sell-off on Wall Street due to rising US yields.

The 30-member Philippine Stock Exchange index (PSEi) dropped 82.42 points or 1.12% to close at 7,261.54 on Wednesday, while the broader all shares index slid 27.15 points or 0.69% to close at 3,855.25.

“The index skidded back after a sell-off from the US market affected investor sentiment. The weak performance by US banks and a rise in oil prices has renewed the threats on inflation, damped the local mood and curtailed the 120-point gain we saw yesterday,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message on Wednesday.

Philstocks Financial, Inc. Senior Research and Engagement Officer Claire T. Alviar said there was spillover of negative sentiment from Wall Street’s performance overnight amid rising US bond yields.

Wall Street’s main indexes fell sharply on Tuesday as weak results from Goldman Sachs weighed on financial stocks and tech shares continued their sell-off to start the year as US Treasury yields rose to milestones, Reuters reported.

The Dow Jones Industrial Average fell 543.34 points or 1.51% to 35,368.47; the S&P 500 lost 85.74 points or 1.84% to 4,577.11; and the Nasdaq Composite dropped 386.86 points or 2.60% to 14,506.90.

Benchmark US Treasury yields jumped to two-year high and two-year yields breached 1% as traders prepared for the Federal Reserve to be more aggressive in tackling unabated inflation.

Back home, sectoral indices were mixed on Wednesday. Mining and oil went up by 21.57 points or 0.21% to 10,271.51; and industrials increased 8.28 points or 0.08% to 10,402.79.

On the other hand, property lost 56.90 points or 1.75% to end at 3,178.77; financials declined 23.14 points or 1.38% to 1,649.13; services slid 23.16 points or 1.14% to 1,995.60; and holding firms fell 73.52 points or 1.02% to 7,098.49.

Value turnover climbed to P5.3 billion with 859.13 million shares switching hands on Wednesday from the P4.95 billion with 850.25 million issues traded on Tuesday.

Decliners outnumbered advancers, 103 against 75, while 50 names closed unchanged.

Net foreign selling declined to P143.67 million on Wednesday from the P172.38 million logged the previous trading day.

Cristina S. Ulang, head of research at First Metro Investment Corp., said the PSEi is seen to trade between 7,000 and 7,300 and could even go up to 7,400.

“This is why we see the swings between bargain hunting and profit taking, but a peaking of the coronavirus disease 2019 (COVID-19) infections will limit selling and propel the market to 7,400,” she said in a Viber message.

Philstocks Financial’s Ms. Alviar said the market can stay above the 7,300 level if COVID-19 cases decline, which could lead to an easing in mobility restrictions. — MCL with Reuters