By Arra B. Francia, Reporter
SHARES continued to tumble on Tuesday as global markets continued their sell-off on fears of faster rate hikes from the United States Federal Reserve.
The bellwether Philippine Stock Exchange index (PSEi) dropped to the 8,500 level yesterday, shedding 0.76% or 65.58 points to 8,550.42. The market fell by more down 200 points intraday, hitting a low of 8,379.83 before paring losses at the closing bell.
With this, the index has already wiped out more than 500 points from its record high of 9,058.62 last Jan. 29.
The broader all-shares index likewise lost 0.83% or 42.51 points to 5,027.91.
“PSEi followed global markets’ decline on continued risk-off sentiment. Rising bond yields continued to fuel the sell-off as hints of inflation pickup prompted that the pace of Fed rate hikes may not be gradual,” First Metro Securities Brokerage Corp. Equity Research Associate Royce Christopher A. Aguilar said in a text message.
The sell-off prevailed in international markets, with the Dow Jones Industrial Average plunging 4.6% or 1,175.21 points to 24,345.75. Meanwhile, the S&P 500 index dropped 4.1% or 113.19 points to 2,648.94 and the Nasdaq Composite Index gave up 3.78% or 273.42 points to 6,967.53.
“Philippine markets could do little to withstand another round of sell-off regionally, with the US recording its worst-one day point drop in history,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.
All sectoral indices remained in negative territory at the session’s end, with the mining and oil sector posting the largest decline, closing at 11,509.38, 2.18% or 256.71 points lower. Holding firms followed with a decrease of 1.11% or 97.66 points to 8,689.61. Financials gave up 1.09% or 24.16 points to 2,179.92; services went down 0.67% or 11.51 points to 1,685.76; while industrials declined by 0.50% or 58.42 points to 11,513.58.
Some 1.89 billion issues switched hands on Tuesday, for a value turnover of P10.42 billion. This is higher than the P8.51-billion turnover in the previous trading day.
Declining stocks prevailed for the day at 159 against the 52 that advanced and the remaining 44 which closed flat.
Foreign investors were sellers for the eighth consecutive day, disposing of a net P1.44 billion worth of funds on Tuesday, albeit lower than the previous session’s P1.95-billion net outflow.
Despite the market’s three-day losing streak, First Metro Securities’ Mr. Aguilar noted that fundamentals remain unchanged, providing opportunity for investors to buy more stocks.
“Investors may try to start accumulating at current levels as global growth is still strong and the local market’s fundamentals are intact,” Mr. Aguilar said.