PSEi drops further to track Wall Street on selling

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STOCKS declined for a second consecutive day due to Wall Street losses and selling among investors.

The Philippine Stock Exchange index (PSEi) closed at 8,206.44, down 67 points or 0.81%.

The all-shares index closed at 4,834.68, dropping 29.47 points or 0.6%.

“Philippine markets reversed from the red after better-than- expected GDP (gross domestic product) growth helped keep the market however it was not enough. This was because US stocks dropped last night as falling oil prices and worries over the progress of a US tax overhaul left investors increasingly averse to putting more money into assets perceived as risky, including equities. European stocks dropped for 7th straight day to suffer longest losing streak in a year,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a text message on Thursday

The Philippine economy grew by 6.9%, data released yesterday showed, above the estimates of analysts. Economists interviewed by BusinessWorld had an average estimate of 6.6%.

The third-quarter GDP growth print is also higher than the 6.7% logged last quarter, but lower than the 7.1% recorded during the same period last year.

Meanwhile, US stocks fell on Wednesday as energy sector shares dropped for a fourth straight session, tracking crude prices, while a late run-up was thwarted by concerns over the passage of a tax revamp after Republican senators were critical of the proposal.

The S&P 500 ended the day down 0.55% at 2,564.62. The Dow Jones Industrial Average fell 138.19 points or 0.59% to close at 23,271.28 and the Nasdaq Composite dropped 31.66 points or 0.47% to 6,706.21.

“The bearish move of two thirds of the index stocks [yesterday] was a sell on news event after our GDP data disclosure surpassed estimates. While this may sound a bit odd, we have to consider that our index remains one of the most expensive markets in Southeast Asia prompting investors to sell more than P3.5 billion worth of shares for the past few days,” Jervis S. de Celis, equities trader at Timson Securities, Inc., said in a text message.

Among the sectoral indices, only financials gained, closing at 2,060.35, up by 11.77 points or 0.57%. Holding firms led losing counters, dropping 142.02 points or 1.67% to close at 8,325.73. Services went down 9.72 points or 0.58% to 1,643.08; property declined by 19.61 points or 0.51% to 3,811.71; industrials lost 40.30 points or 0.36% to end at 10,962.67; and mining and oil gave up 22.14 points or 0.18% to close at 12,226.78.

Value turnover stood at P7.92 billion, up from Wednesday’s P5.91 billion, with 807.28 million shares changing hands.

Decliners outnumbered advancers, 122 to 74, while 38 names closed unchanged.

Net foreign selling climbed to P1.1 billion from the previous session’s P649.54 million. — Patrizia Paola C. Marcelo with Reuters

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