Sentiment-driven sessions on the Philippine Stock Exchange (PSE) gave way to panic among investors who found no other direction to follow on Monday after seeing massive Shanghai-led slides in equities markets around the world.
“The drop is sentiment-driven, given the uncertainty brought about by the weak Chinese currency, which is causing concern globally,” Astro del Castillo, managing director at First Grade Finance Inc., said in a phone interview during trading.
Investors from bigger bourses overseas have shown disappointment over China’s lack of effective state intervention to arrest the decline in its own markets, which continued to drag global stocks with a further 8.8 percent fall in its blue-chip CSI300 index on Monday after last week’s 11 percent tumble in its main market indexes.
In Manila, the benchmark PSE index plummeted by more than 7 percent at one point in Monday’s trade before closing down 6.7 percent or 487.97 points at 6,791.01. The broader All Shares index lost 6.06 percent or 251.99 points at 3,906.13.
“Sentiment is very bad. We’re just mimicking the foreign market,” del Castillo said.
“We don’t see any factors strong enough to pull the market back up [right now]. Investors are very apprehensive on what to look for, especially since the second-quarter earnings results are relatively low,” he added.
Del Castillo said a positive factor from Monday’s session is the possible “window for accumulation” that could open up tomorrow or the day after. He warned, however, that the rebound would be tempered by continuing uncertainty over the Chinese currency’s impact on global markets.