Stocks decline to track sell-off in other markets

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By Arra B. Francia, Reporter

STOCKS bled on Tuesday, tracking the sell-off seen in other regional markets after hitting consecutive record highs in previous weeks.

Stocks decline to track sell-off in other marketsThe 30-company Philippine Stock Exchange index (PSEi) dropped 1.63% or 148.14 points to settle at 8,910.48 yesterday, while the broader all-shares index lost 1.48% or 78.36 points to 5,194.64.

“I believe this is a correction, after we have been up from the start of the year within a span of less than a month. And the one that triggered this was the global market which was down today,” Diversified Securities, Inc. equity trader Aniceto K. Pangan said in a phone interview on Tuesday.

International markets were mostly down on Monday, with the Dow Jones Industrial Average shedding 0.67% or 177.23 points to 26,439.48. The Nasdaq Composite Index was down 0.52% or 39.27 points to 7,466.50, while the S&P 500 index dipped 0.67% or 19.34 points to 2,853.53.

Southeast Asian stock markets fell on Tuesday tracking Wall Street.

“Asian markets are tracking US equity markets, which finished broadly lower with tech and energy stocks accounting for much of the decline,” said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

The dollar traded above a recent three-year low against a basket of major currencies on Tuesday, having drawn some support from a rise in US bond yields as traders awaited a Federal Reserve policy meeting for fresh catalysts.   

BDO Capital and Investment Corp. President Eduardo V. Francisco also said the market’s decline was due to profit taking.

“There was just profit taking but fundamentals remain unchanged,” Mr. Francisco said.

Diversified Securities’ Mr. Pangan noted that yields in the United States had hit an all-time high on Monday at 2.7%, prompting investors to take profits.

“With the increase in rates, definitely this will reduce liquidity in the system…with that, it gave a signal to the investors to take profits,” he said.

All sectoral indices shed points on Tuesday. Holding firms slipped 1.85% or 173.18 points to 9,189.77; property was down 1.85% or 76.09 points to 4,028.38; mining and oil gave up 1.81% or 222.53 points to 12,011.52; services moved down 1.7% or 29.62 points to 1,706.68; industrials dropped 1.39% or 167.50 points to 11,849.03; while financials closed lower by 0.62% or 14.12 points to 2,244.03.

The market was valued at P10.05 billion yesterday after some 2.39 billion issues switched hands, higher than Monday’s P8.87 billion.

Decliners outpaced advancers, 151 to 58, as 55 issues remained unchanged.

Net foreign outflows widened to P2.02 billion on Tuesday from the P86.04 million recorded on Monday.

Mr. Pangan said the market could fall to as low as the 8,800 mark this week as it continues to correct. — with Reuters