The Philippine Stock Exchange index (PSEi) dropped back to the 6,700 level on Monday as investors start to realize the potential impact of a 25-basis-point increase in US interest rate hike on financial markets
The Federal Reserve also signaled more rate increases in 2017.
The bellwether PSEi closed down 1.99 percent or 136.58 points at 6,714.13. The broader All Shares declined by 1.44 percent or 59.77 points to 4,099.65.
The PSEi dipped to an intraday low of 6,683.35 after the midday recess
“The local market was bludgeoned as foreign investors continued to head for the exit on expectations of more aggressive US Fed rate hikes. The PSEi sank to a low of 6,683.35 before closing at 6,714.13, 136.58 points or 1.99 percent lower,” Jeremy Yumul, head of research and vice president at RCBC Securities Inc., said.
Regina Capital Development Corp. Managing Director Luis Limlingan noted a lack of fresh leads prompted investors to follow the downtrend in US markets which “swung to a loss after the Department of Defense announced a Chinese naval vessel took an underwater Navy drone that was collecting water measurements like temperature and salinity.”
There was a bit of scare that occurred as the incident happened just off the Philippine coast,” Limlingan said, citing the tendency among investors to cling onto any new market-moving news.
Justino Calaycay, A&A Securities head of research and marketing, noted the usual optimistic view of investors towards the Philippine market has “turned cautious” as they review the economic and political leadership of the country towards 2017, amid all the other factors —mostly leads from abroad—that can influence the PSEi.
“There are just too many factors at play, the impact of which, on the real economy, is presently difficult to quantify. The main question that runs through our mind at this point is whether we will see a resurgence of the market’s bull or the emergence of the bear come 2017. We are still keeping our fingers crossed,” Calaycay said.
The Services counter was the gainer on Monday. The Financial lost 3 percent and the Property sector declined by 2.84 percent.
Globe Telecom Inc. was the sole advancer among the actively traded stocks. The main losers were BDO Unibank Inc., Metropolitan Bank and Trust Company, SM Prime Holdings Inc., and Jollibee Foods Corp.
Over 1.17 billion shares, worth P5.79 billion, were traded on Monday. Losers outnumbered winners, 135 to 61, while 33 stocks traded unchanged.
On Friday, the PSEi eased lower by 0.07 percent or 4.60 points at 6,850.71, while the All Shares dipped by 0.05 percent or 1.93 points to 4,159.42.