AFTER a one-day break, local equities resumed their slide on Thursday and went against the direction of US markets, which hit intraday highs after a tax plan came out that aims to dissuade businesses from moving overseas.

The Philippine Stock Exchange index (PSEi) gave up 65.88 points or 0.8% to close at 8,156.04.

Also sliding was the broader all-shares index, which lost 32.84 points or 0.68% to end at 4,818.25.

“Heavy foreign selling on the prospects of higher interest rates in the US caused our market to correct. The dollar is also strengthening because of this, another dampener for Philippine equities,” said Miguel A. Agarao, vice-president of Philequity Management, Inc.

“US stocks rose on Wednesday, with both the large-cap S&P 500 and the small-cap Russell 2000 hitting intraday records; financial shares were among the strongest sectors of the day after a leaked tax plan boosted the market,” said Luis A. Limlingan, business development head at Regina Capital Development Corp.

He said this was not the case for local stocks, which he said “continued with exodus of funds as they clean portfolios” right before the end of the third quarter.

Mr. Limlingan said the US tax plan would make a number of other changes to the individual side of the code, including collapsing the number of tax brackets to three from seven, with the top rate set at 35% but leaving open the possibility that it could be set higher for some.

The plan calls for cutting the corporate rate to 20%, from the current 35%. Small businesses would pay 25%. Companies would be allowed to immediately write off investment expenses, though only for five years, he added.

“The plan proposes a foreign minimum tax to prevent businesses from moving abroad to avoid US taxes altogether. It would offer a repatriation holiday, allowing multinationals to bring home offshore profits at a reduced tax rate, though the plan offers few details,” he said.

“The corporate alternative minimum tax would be eliminated. Details on how to fund for the tax plan was however not discussed,” he added.

Mining and oil went against the flow and advanced by 108.33 points or 0.78% to 14,041.03.

Meanwhile, holding firms were the biggest loser as the counter dropped 98.17 points or 1.18% to 8,230.23. Property stocks as well as industrial issues trailed closely.

Property firms lost 30.81 points or 0.79% to 3,848.87 and industrials dropped by 85.56 points or 0.77% to 11,036.51. Services went down by 2.97 points or 0.18% to 1,690.73. Financials dropped by 6.66 points or 0.34% to 1,966.08.

Trading value was at P10.58 billion, slightly higher than the other day’s turnover of P10.46 billion, with P1.65 billion shares changing hands. Advancers at 70 fell behind decliners at 141, with 38 issues closing unchanged.

Ayala Land, Inc. was the most active stock, followed by Energy Development Corp., BDO Unibank, Inc., SM Investments Corp. and SM Prime Holdings, Inc. round out the top five. — Victor V. Saulon