Failing to come across leads from the local side, Philippine shares remained sluggish and shoved the benchmark index down at the beginning of the week, mirroring the trend in the still lethargic regional markets.
“With the ghost of the Fed lingering on investors’ crosshairs, the flow of confidence or at least cautious optimism may have to wait for the next round of positive leads,” Jun Calaycay, Accord Capital Equities Corp. analyst, said, referring to the US Federal Reserve.
“The challenge facing markets moving forward is what to consider as a good lead. So far, improving economic numbers in the US continues to elicit fears, paralyzing the local market—or at least preventing the bulls from stamping its class with the same conviction that marked its dominance in the first five months of the year,” he said.
Calaycay also mentioned that Europe appears to be heading to another turbulent period, and investors may find this as another reason to stay away from equities and hold on to their cash.
The Philippine Stock Exchange index (PSEi) started the week with a hefty decline, falling hard by 2.79 percent, or 181.57 points to end at 6,318.91, while the broader all-shares index shed 2.47 percent, or 98.07 points to 3,874.56.
“Fed tapering fears revisited Asian markets, spooking investors after US jobs numbers showing improvements in the world’s largest economy raised bets monetary authorities will begin to dial back stimulus by September,” Calaycay said.
Trading activity was kept at a slow pace with value almost similar with the previous session, with only P5.13 billion, or 1.47 billion shares changing hands. Losers beating gainers, 122 to 33.
Some of the subsectors also registered major losses with holding firms posting a 3.35-percent drop, or 199.37 points to 5,761.35, followed by industrial, which went down by 3.04 percent, or 297.31 points to close at 9,477.49.
Financials slipped by 2.43 percent, or 39.87 points to 1,599.40, while the property counter plummeted by 2.60 percent, or 65.82 points to 2,470.93. Services, and mining and oil both slid by more than 1 percent.
Most of the actively traded stocks were Ayala Land Inc., SM Investments Corp., SM Prime Holdings Inc., Metropolitan Bank and Trust Co., Alliance Global Group Inc., Philippine Long Distance Telephone Co., Ayala Corp., Megaworld Corp. and Metro Pacific Investments Corp.