Philippine shares fell sharply Monday on a knee-jerk reaction to what local traders said was a surprise downturn in the US market on Friday.
The Philippine Stock Exchange index (PSEi) slipped below the 7,800-point level, and by 3:00 p.m., it was down 2.08 percent or 165.30 points at 7,781.59. It closed with pared losses of 1.03 percent at 7,865.27.
Sentiment has been fragile since the local market stepped back last week from record levels amid perceptions stocks have been overbought.
“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,” Harry Liu, Summit Securities Inc. president, 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 added.
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.