The benchmark PSEi sank to the 6,800-point level, wiping out gains in the year to date, as jittery investors dumped positions for the second consecutive trading day amid continuing uncertainty on the policy direction of the new administration of President-elect Donald Trump.
“Philippine stocks fell for a second day as investors tried to gauge the impact of Donald Trump’s likely policies on the region’s markets,” said Luis Limlingan, managing director at Regina Capital Development Corp.
“Investors have also been wary of the upcoming MSCI rebalancing, the third quarter GDP [gross domestic product]figure, and the last few batches of earning releases,” Limlingan added.
The PSEi dropped 1.49 percent or 103.61 points to 6,871.48, while the broader All Shares index lost 1.17 percent or 49.29 points to finish at 4,170.92.
The benchmark index gave up its gains in the year to date after dropping to the 6,800-point level, from 6,952.08 on December 29, the last trading day of 2015.
A sell-off in index heavyweight PLDT Inc. accounted for much of the market’s loss after the company reported a 50-percent drop in core net income for the third quarter of 2016.
Outside the Philippines, Asian stocks fell mainly on speculation that Trump is taking “a more protectionist approach to trade and that his plans to increase spending in the US will push up inflation and result in a swifter pace of interest-rate increases by the Federal Reserve,” Limlingan said.
Trump’s economic adviser Anthony Scaramucci said the Trump administration has pledged to spend $1 trillion on infrastructure development, while sounding off a softer stance on trade. This indicated “that the President-elect is open to negotiations before slapping barriers on imports,” Limlingan added.
All sectoral indices were in the red, led by a 2-percent plunge in the Services counter.
Among the actively traded stocks were losers Ayala Land Inc., Ayala Corp., Universal Robina Corp., Puregold Price Club Inc., Metrobank, PLDT Inc., and GT Capital Holdings Inc.
Joylin Telagen, equity analyst at IB Gimenez Securities Inc., said the uncertainties surrounding President-elect Trump’s policies are weighing on the markets, adding to price pressures from the third-quarter earnings.
“Though earnings are mixed, they’re mostly no-surprise or even below expectations,” she said.
“At this level, I think the index might consolidate at around 6,800. With the third-quarter GDP result [due]on Thursday a make-or-break, the PSEi may go in two directions: either down to 6,600, or back to 7,000,” she added.
More than 986.45 million shares were traded on Monday, valued at P7.34 billion. Decliners outpaced advancers, 140 to 48, while 39 issues were unchanged.
On Friday the PSEi plunged to its lowest since March this year at 6,975.09, down 206.78 points or 2.88 percent.