STOCKS continued to drop on Tuesday as net foreign selling surged amid Wall Street’s rise and expectations of global monetary tightening.
The benchmark Philippine Stock Exchange index (PSEi) fell by 110.40 points or 1.65% to close at 6,577.45 on Tuesday, while the broader all shares index retreated by 40.81 points or 1.13% to 3,550.40.
“Philippine shares continued to slide as investors returned to the US after being beaten down last week. Wall Street is also looking ahead to new home sales… US stocks bounced on Monday as investors snapped up beaten-down shares such as banks after the Dow Jones Industrial Average notched eight straight losing weeks,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
Net foreign selling surged to P9.58 billion on Tuesday from P305.97 million the previous trading day.
US stocks ended higher on Monday as gains from banks and a rebound in market-leading tech shares supported a broad-based rally following Wall Street’s longest streak of weekly declines since the dotcom bust more than 20 years ago.
The Dow Jones Industrial Average rose 618.34 points or 1.98% to 31,880.24; the S&P 500 gained 72.39 points or 1.86% to 3,973.75; and the Nasdaq Composite added 180.66 points or 1.59% to 11,535.27.
On Friday, the S&P 500 closed 18.7% below its record closing high reached on Jan. 3. If the benchmark index closes 20% or more below that record, it will confirm it has been in a bear market since then.
Markets have been roiled in recent weeks by worries about persistently high inflation and aggressive attempts by the US Federal Reserve to rein it in while the global economy copes with fallout from Russia’s invasion of Ukraine.
First Metro Investment Corp. Head of Research Cristina S. Ulang said the market was down again mainly due to increasingly more hawkish messaging from the world’s biggest central banks, including the European Central Bank (ECB).
The euro leapt on Tuesday after the ECB said it was likely to lift its deposit rate out of negative territory by September.
Majority of the sectoral indices ended in the red, except for mining and oil, which gained by 21.71 points or 0.18% to 11,780.86.
Meanwhile, holding firms sank by 145.31 points or 2.35% to 6,018.51; financials dropped by 27.79 points or 1.74% to 1,566.21; property lost 38.99 points or 1.27% to end at 3,017.08; industrials declined by 109.72 points or 1.17% to 9,248.14; and services went down by 9.12 points or 0.48% to 1,873.27.
Decliners bested advancers, 120 versus 63, while 54 names ended unchanged.
Value turnover surged to P20.20 billion on Tuesday with 1.54 billion shares changing hands from the P6.64 billion with 1.22 million issues seen on Monday. — Luisa Maria Jacinta C. Jocson with Reuters