Stocks contract 2.7%

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FoREIGN investors pulled out of the local market with the Philippine Stock Exchange index down by 2.71 percent losing 194.17 points to close at 6,966.21, reverting back to the August Ghost Month level.

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The selloff resulted from panice brought about by falling oil prices and their impact on Russia, whose problems are feared to result in a global crisis.

Oil prices skidded below the psychological barrier of $60 per barrel in yesterday’s trading. The price has tumbled from $100 per barrel in June.

Miguel Agarao, analyst at Wealth Securities Inc., said the panic selling came from the concerns over the Russian economy. “There may be a default . . . And there is a strong financial threat. People are worried that we will go back to the crisis in 1997,” Agarao said.

Joseph Roxas, Eagle Equities President said the drop in PSEi “doesn’t make sense” as Philippines is one of the countries seen benefitting from the oil price drop.

“In my view, I think people are selling because we will go into a long holiday,” Roxas said.
Agarao said foreign investors unloaded stakes in holding firms.

“From here, it depends where the market will head after this. There will be a US Federal Reserve meeting tomorrow. So it will depend on what Janet Yellen says,” Agarao said.

Holding Firms led the decline in the sectoral indices, down 3.20 percent or 200.54 points to 6,057.94. Other sectoral indices were bathed in blood: Financials down 2.34 percent or 39.26 points to 1,635.83; Industrial declined 1.86 percent or 219.59 points to 11,570.34; Services lost 1.89 percent or 39.64 points to 2,059.83; Mining and Oil edged down 0.72 percent or 110.89 points to 15,327.36; and Property slumped by 2.48 percent or 69.45 points to 2,732.32.

Only JFC increased among the top traded stocks, while the rest declined including TEL, URC, ALI, AP, AC, BLOOM, SM, DMC and AGI.

On Wednesday, the bellwether PSEi dropped 1.58 percent or 115.24 points to 7,160.38, while the All Shares index also went down 0.90 percent or 38.54 points to 4,227.62.

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