The stock market fell by nearly 2 percent on Tuesday, with analysts pointing to renewed fears over the global economy.
The benchmark Philippine Stock Exchange Index (PSEi) on Monday sank by 1.89 percent or 127.70 points to close at 6,637.43, while the wider All Shares decreased by 1.34 percent or 51.84 points to 3,816.77.
“There are several factors that led to the decline of the local bourse. First, the US’ Wall Street has been down for two consecutive days (Friday and Monday), while Japan’s Nikkei today (Tuesday) decreased by 5 percent,” said Luis Limlingan, head of research at Regina Capital Development Corp. said.
“In addition, as a result of a strong non-farm payroll data in the US last week, investors are digesting this development as an indication that the Federal Reserve might increase its rate next month, when to do so would hurt the global economy since it is too weak to endure such hike,” Limlingan added.
Jonathan Latuja, analyst at Unicapital Securities Inc., echoed this, saying: “Global markets are down, specifically Japan’s Nikkei of global anxiety. These are the same stories. This time, global investors are starting to question their central banks’ ability to produce growth despite the obvious slowdown.”
Except for the mining and oil sub-index, which soared by 7.14 percent, all others were in red on Tuesday, led by property that saw a 2.6- percent decline.
Total value turn over was weak at P3.4 billion, with losers edging out gainers, 119 to 61, while 30 issues remained unchanged.