PH stocks fall below 7,800 on fresh Greek default fears

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Philippine shares fell on the first trading day of the week on a knee-jerk reaction to Wall Street’s slump on Friday, which reflected fresh global market fears of a Greek default.

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Sentiment has been fragile since the local market stepped back last week from record levels amid perceptions Philippine stocks have been overbought, and as investors kept an eye out for any sign of a possible US Fed rate hike.

The Philippine Stock Exchange index (PSEi) dropped to a low of 7,700 in afternoon trade, posting more than a 2 percent loss. It pared its closing loss to 1.03 percent or 81.62 points as it finished at 7,865.27.

The broader All Shares index slipped 0.94 percent or 42.69 points to 4,494.17.

Rens Cruz, an investment analyst at online brokerage firm 2TradeAsia.com, said investors were affected by global concerns over Greece’s possible default on its debts and exclusion from the eurozone bloc.

“Wall Street’s sharp slump on concerns over Greece’s possible default weighed on local sentiment. However, most remained at bay to check how the talks would progress, apart from concern on the timing of the Fed’s rate hike,” Cruz said.

Harry Liu, Summit Securities Inc. president, said the market was largely influenced by the “sudden decline” in the US markets on Friday mainly on worry over Greece’s economy.

“The drop in the local market was after the US markets’ sudden decline. Technically, the support of 7,820 has been broken, and now I think we will be able to experience a longer consolidation period,” Liu said in a brief phone interview.

“We should see a medium-term bear situation, but the long-term is very much intact in an uptrend,” he said, adding, the market may have to wait until the release of the results of listed companies’ six-month earnings, which may provide a new stimulus for the market.

On Wall Street Friday, the Dow Jones Industrial Average finished down 279.47 points, S&P 500 down 23.81 points and Nasdaq down 75.98.

Given that Wall Street is anticipating developments in Greece, Liu said the Philippine market is likely to track the US markets’ movements from here onward.

The mining and oil sector posted gains, while the rest of the other sectors declined, led by a 1.54-percent loss in the holding firms counter.

Metropolitan Bank and Trust Company and Universal Robina Corp. were the only gainers among the top companies. Actively traded stocks which closed lower included Ayala Corp., GT Capital Holdings Inc., SM Prime Holdings Inc., Ayala Land Inc., Alliance Global Group Inc., International Container Terminal Services Inc., BDO Unibank Inc. and Energy Development Corp.

About 1.14 billion shares were traded, worth P18.56 billion. Losers outnumbered gainers, 114 to 62, while 38 issues finished unchanged.

On Friday, the bellwether PSEi slipped 0.02 percent or 1.31 to 7,946.89, while the broader All Shares index added 0.06 percent or 2.54 points to settle at 4,536.86.

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2 Comments

  1. May be we should start blaming PNoy for the fall. When the stocks hit 8000 marks, he immediately rushed to the PSE and again try to grab credit for the climb. Pathetic president, he is now looking for all opportunities to buoy up his nose diving credibility.