THE benchmark stock index retreated to the 7,100 territory as sellers overwhelmed the market ahead of the US nonfarm payrolls data and next week’s rebalanced bellwether.
“The market headed for a risk-off trading ahead of tonight’s release of US nonfarm payrolls data,” Victor Immanuel Felix, equity analyst at AB Capital Securities Inc., said.
“That would be one of the deciding factors whether the Fed would raise rates in next week’s FOMC meeting,” Felix noted.
The market was in the red at the start of Friday’s session, dropping to the 7,250 level. But it was not until the last 10 minutes of the session when the bellwether PSEi slumped below 7,150.
The PSEi lost 149.18 points or 2.05 percent to close at 7,146, while the All Shares slipped by 59.42 points or 1.35 percent to 4,343.39.
“Sustained peso weakness has also been putting pressure on blue chips,” Felix noted.
“Better than expected jobs data might possibly move the Fed to raise rates,” Joylin Telagen, equity analyst for IB Gimenez Securities Inc., said.
“For next week, it will be a cautious week with a downward bias because of the Fed meeting. The PSEi might retest the 7,000 support level, and there is downside risk to as low as 6,800. If the Fed continues to hold off on the rate hike, the index might move back to 7,300,” Telagen said.
The Holding Firms index led the decline, sliding by 2.82 percent, dragged by SM Investments Corp’s (SMIC) 9.24-percent drop.
Telagen noted the rebalanced PSEi will add some pressure on the index as well.
Emperador Inc. (EMP) declined by 5.79 percent as the adjusted line up of PSEi stocks will reflect the absence of EMP which will exit the roster of the top 30 benchmark stocks.
More than 3.74 billion shares were traded, valued at P8 billion. Losers outweighed winner, 102 to 72, while 47 issued traded unchanged.
On Thursday, the PSEi was basically flat. It rose by 0.01 percent or 0.89 points to 7,295.45, while the All Shares inched up by 0.03 percent or 1.51 points at 4,402.81.