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Stocks slump anew on US tax reform concerns

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PHOTO BY PSE

THE BENCHMARK INDEX ended this week with a slump, tracking the general downturn of regional markets.

The 30-member Philippine Stock Exchange index (PSEi) dropped 1.46% or 124.02 points to close at 8,337.04 on Friday.

The broader all-shares index also shed 1.37% or 68.11 points to 4,870.43.

“Local market declined in line with the drop of most regional markets as it took cue from the retreat of US stocks on Thursday given the renewed concern that the tax reform legislation will be stalled again,” PCCI Securities Brokers Corp. Research Head Joseph James F. Lago said in an e-mail.

Friday’s performance saw a reversal of gains recorded earlier this week, as investors cheered the pending passage of the government’s tax reform program. The Tax Reform for Acceleration and Inclusion (TRAIN) bill ratified by both chambers of Congress is now up for enactment.

“Wednesday’s rally of the PSEi also seen as overdone in reaction to the passage of the first part of the country’s tax reform legislation, TRAIN, coupled with leading key valuations that are still higher than the region’s averages,” he added.

“Investors were also selling on the news as series of central bank meetings concluded for the year beginning the FOMC (Federal Open Market Committee) Wednesday night,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

The Bangko Sentral ng Pilipinas also held its policy meeting on Thursday, choosing to keep interest rates steady throughout the year.

All sectoral indices moved to negative territory. The mining and oil sub-index saw the largest decline at 3.61% or 419.7 points to 11,181.86; followed by property, which ended 2.77% lower or 109.50 points at 3,833.28.

Holding firms dropped 1.65% or 141.48 points to 8,431.32; industrials lost 0.53% or 59.84 points to 11,127.42; services slipped 0.31% or 5.11 points to 1,694.03; and financials went down 0.15% or 3.45 points to 2,167.39.

Losers prevailed against gainers, 123 to 81, while 38 names were unchanged.

A total of 941.26 million issues valued at P10.73 billion changed hands, up from Thursday’s P7.62 billion.

Foreigners maintained a net selling position of P1.09 billion, a reversal of the previous session’s net purchases worth P1.06 billion. — Arra B. Francia