Still caught amid overseas geopolitical tensions, the local stock market fell to its weakest level this year on Wednesday, further wiping out its year-to-date gains.
Jun Calaycay, Accord Capital Equities Corp. analyst, said that the kaleidoscope is turning again, shifting focus to geopolitical tensions and pushing US Federal Reserve tapering concerns to the sidelines.
“Even as attention finally shifted away from Fed concerns, it nevertheless found another scapegoat to justify fears—a possible escalation of the tensions in Syria. Observers of the geopolitical stage are talking of increasing probability of military action by the United States,” Calaycay said.
However, Jonathan Ravelas, chief market strategist of BDO Unibank Inc., said that given the huge drop, bargain-hunting could occur in the succeeding trading sessions.
Even though it managed to wipe out early losses, the Philippine Stock Exchange index (PSEi) still ended at its weakest level this year, losing 178.93 points or 3.02 percent to 5,738.06.
“The floodgates of pessimism opened wide after the benchmark index breezed past the 5,900-[point]mark, sending year to-date returns to negative for the second time this year,” Calaycay said, adding that there is
nothing inspiring for investors to look forward to except the release of the country’s second quarter gross domestic product growth.
During market recess, the main index hit an intraday low of 5,562.13.
The sectoral indices ended on the red side with holding firms and property both falling by more than 4 percent, while financials dipped by more than 3 percent. Industrial and services, on the other hand, both went down by more than a percent. Mining and oil was flat.
Some of the top losers on Wednesday were SM Investments Corp., GT Capital Holdings Inc., Filinvest Land, Inc., Philippine Seven Corp., Security Bank Corp., China Banking Corp., Global-Estate Resorts Inc., and RFM Corp.
On Tuesday, share prices started to shed its year-to-date gains on the weight of the same concerns. The PSEi declined 3.96 percent or 244.22 points to 5,916.99, while the wider all-shares index slipped 3.59 percent or 134.98 points toward 3,626.64.
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 at the 5,893-point level.