Fed issues send stock index near 6,000

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After a three-day break, Philippine shares caved in by almost 400 points on Thursday’s trade after concerns on the US Federal Reserve loomed anew.

Jun Calaycay, Accord Capital Equities Corp. analyst, said that the main index appears to have played catch up to its peers and global markets, as sentiments stayed cold on lingering concerns over the Fed’s stimulus program.

According to him, bets that the US regulator will begin to taper its $85-billion bond purchase program rose after the minutes of the last Fed meet was made public.

The weaknesses among Thailand and Indonesia, as well as India aggravated the outlook that has been reeling from the slowing of the Chinese economy, he further cited.


During the first trading session of this week, the Philippine Stock Exchange index (PSEi) heavily dipped into the red with a 389.22-point loss, or a decline of 5.96 percent toward 6,136.73. The benchmark index even neared the 6,000-point level as it hit 6,086.4 during the early hours of the session.

“It is now approaching a crucial technical support at 5,900. The surge in value today could indicate either a fresh negative momentum, or a climax sell-off. What is quite clear is after three days of inactivity, whence other markets slumped, local investors released pent-up sentiments that the holidays bottled up,” Calaycay said.

Total value stood at P12.3 billion with decliners awfully overshadowing advancers, 165 to 15, while 22 issues were unchanged.

The wider all-shares barometer also registered major decline, falling by 5.49 percent, or 218.26 point to 3,756.67.

All of the sectoral indices shed more than 4 percent, with property losing 7.94 percent, or 206.16 toward 2,390.21, followed by holding firms, which slumped by 7.62 percent, or 440.52 points to 5,339.07.

Financials slumped by 5.61 percent, or 88.04 percent to 1,481.41, while mining and oil slid 4.46 percent to 655.19 points to 14,046.11.

Services, on the other hand, lost 4.26 percent, or 87.78 points to 1,971.36, while industrial saw a reduction of 3.83 percent, or 376.02 points to 9,447.59.

Some of the most actively traded stocks were SM Investments Corp. (SMIC), Philippine Long Distance Telephone Co., Alliance Global Group Inc. (AGI), Ayala Land Inc., Ayala Corp., Metropolitan Bank and Trust Co., Universal Robina Corp., Metropolitan Pacific Investments Corp. and SM Prime Holdings Inc.

The top losers among these stocks were SMIC, AGI, ALI and SM Prime.

The stock market took an extended break on Monday until Tuesday as tropical storm Maring and the southwest monsoon submerged most parts of Metro Manila and Luzon. There was also no trading on Wednesday to observe the death anniversary of Sen. Benigno Aquino Jr.

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