Main index sinks to three-week low in thin trade

PHILIPPINE SHARES dropped to the 7,200 level on Thursday to hit a three-week low amid thin trade as the market continued to look for positive leads and with negative sentiment on Wall Street spilling over to the local bourse.

The Philippine Stock Exchange index (PSEi) dropped by 1.13% or 83.87 points to end at 7,283.79 on Thursday, while the broader all shares index lost 1.07% or 43.37 points to close at 4,007.39.

This was the PSEi’s lowest close in over three weeks or since it ended at 7,272.65 on Sept. 30.

“The local market extended its decline this Thursday as investors continued to exit amid the lack of positive catalysts. Negative spillovers from Wall Street amid the rise in the US’ long-term Treasury yields also weighed on the local bourse,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “The exit of foreign funds also contributed to the fall.”

Value turnover decreased to P3.8 billion on Thursday with 776.65 million issues changing hands from the P4.52 billion with 1.2 billion shares traded on Wednesday.

Meanwhile, net foreign selling rose to P206.43 million on Thursday from P159.24 million on Wednesday.

“Local sentiment was pulled down, tracking global sentiment amid rising yields and economic uncertainties,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Philippines shares marked another loss as the Dow and S&P 500 fell, pressured by the 10-year Treasury yield’s rise to 4.25%.”

Wall Street closed lower on Wednesday, as climbing Treasury yields pressured mega-cap stocks and investors grew less confident about strong rate cuts from the Federal Reserve, Reuters reported.

Benchmark 10-year US Treasury yields reached a three-month high with investors reassessing the Fed rate cut outlook over the next few months against the backdrop of strong economic data and the upcoming presidential election.

The Dow Jones Industrial Average fell 409.94 points or 0.96% to 42,514.95; the S&P 500 lost 53.78 points or 0.92% to 5,797.42; and the Nasdaq Composite lost 296.47 points or 1.6% to 18,276.65.

US markets are near record-high levels, but a combination of earnings, a changing monetary policy outlook and the upcoming presidential election will test the rally and could stoke volatility, analysts said.

Back home, all sectoral indices closed lower on Thursday. Financials went down by 1.76% or 42.52 points to 2,364.47; industrials dropped by 1.71% or 172.66 points to 9,904.09; mining and oil declined by 1.24% or 108.67 points to 8,597.95; property sank by 1.01% or 29.26 points to 2,868.35; holding firms lost 0.66% or 41.40 points to end at 6,148.86; and services retreated by 0.57% or 12.95 points to 2,224.81.

Market breadth was negative as decliners outnumbered advancers, 139 versus 53, while 53 names closed unchanged. — R.M.D. Ochave with Reuters