PSEi drops 1.2% after mining contracts canceled

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THE stock market lost more than 80 points on Tuesday as investors went on risk-off selling after the government canceled 75 mining contracts earlier in the day, ahead of the US Congress testimony of Federal Reserve Chair Janet Yellen.

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The benchmark PSEi lost 87.83 points or 1.20 percent to 7,206.84, while the All Shares also declined by 34.28 points or 0.78 percent to close at 4,374.58.

Share prices were mainly dragged down by the Department of Environment and Natural Resources’ (DENR) cancellation of mineral production sharing agreements with mining firms, Luis Limlingan, managing director of Regina Capital Development Corp., said.

On top of that, investors were also waiting for Yellen’s report on the Fed’s monetary policy and the timing of interest rate increases this year.

“Mining stocks were the biggest losers, because of the recent announcement by the DENR to cancel mineral sharing agreements,” Limlingan said in a text message.

“The biggest news item that influenced the markets, however, is Federal Reserve Chair Janet Yellen later tonight. She will appear before the Senate Banking Committee to deliver the Fed’s semi-annual Monetary Policy Report to Congress and answer questions from lawmakers,” he added.

Rather than corporate earnings, he now sees the PSEi the controversial developments hounding the mining industry as the biggest market-moving news in the days ahead as well as the timing of interest rate hikes in the US.

The sectoral indices were all in the red, led by Mining and Oil index which posted a loss of 327.52 points or 2.67 percent.

However, LT Group Inc. and Semirara Mining and Power Corp. managed to post gains among the actively traded stocks. Among the losers were Ayala Land Inc., SM Investments Corp., Universal Robina Corp., Arthaland Corp. and Philex Mining Corp.

More than 4.108 billion shares were traded, valued at P7.3 billion. Decliners outpaced advancers, 100 to 95, while 44 shares were unchanged.

On Monday, the PSEi increased by 0.82 percent or 59.46 points to 7,294.67, while the wider All Shares climbed 0.64 percent or 28.35 points to 4,408.86.

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