Some random overseas and local concerns such as the Fed tapering, United States-Syria tension and pork barrel issue in the country led the market to a huge fall on Tuesday, even wiping out “to date” gains.
Jun Calaycay, Accord Capital Equities Corp. analyst, said sentiments had reversed Monday’s cheer as attention shifted to the Syrian conflict.
“Undeniably, whether justified or not, fears over anticipations the Fed will taper the $85-billion quantitative easing three program rings loud resulting [in]a drop of such magnitude by the local stock market index. With the PSEi [Philippine Stock Exchange index] retreating past the 20-percent line raises the question of a bearish reversal,” Calaycay added.
Jonathan Ravelas, chief market strategist of BDO Unibank Inc., agreed that local share prices fell on the weight of September taper talks as well as on recent concerns in the Middle East.
For his part, Juanis Barredo, COL Financial technical analyst, said the market proceeded to correct due to a confluence of factors, naming same reasons as above.
“[The market] it is still pressured by prevailing weakness from the US and Asia as well as by the outflows caused by tapering fears in US stimulus which is placing pressure on Asian currencies,” he specified.
“This may prompt our index to see next support between 5800 to 5678,” Barredo added.
Ravelas further said that there could be more uncertainty in the market because of the pork barrel issue as it could delay needed reforms and infrastructure spending as it goes under strict scrutiny.
Even though it managed to cut early losses, PSEi still declined 3.96 percent, or 244.22 points to 5,916.99, as well as the wider all shares, which slipped 3.59 percent, or 134.98 points toward 3,626.64.
“For the second time this year, the index has wiped out ‘to-date’ gains, drawing attention to the technical charts and leaving fundamentalists with less believers,” Calaycay said.
As early as 10 a.m. of Tuesday, the benchmark index slipped below 6,000, falling by 180 points, or 2.92 percent to 5,981 and as it closed for market recess, the index was already at 5,893-level.
Also, all the sectors posted significant fall.
Some of the most actively traded stocks are Aboitiz Equity Ventures, Ayala Land Inc., Ayala Corp., SM Investments Corp., BDO Unibank Inc., Globe Telecom Inc. and Robinsons Land Corp.