Market enters bear territory

The local stock market slipped into bear territory Tuesday as regional risk aversion was fueled by talks about the US Federal Reserve’s tapering of monetary stimulus as early as this month.

Declining for the sixth straight session, the main-share Philippine Stock Exchange index lost 122.54 points or 2.04 percent to close at 5,886.40. The main index has now lost 1,513.60 or 20.4 percent from the recent record high of 7,400.

“After putting up a valiant front, the bulls just couldn’t resist the bears’ selling pressures. Foreign funds have been selling the market,” said Manny Lisbona, deputy chief at PNB Securities. “The peso’s weakness signals that money is migrating out of the Philippines.”

All counters were in negative territory but the most battered was the property counter (-3.95 percent) on talks about the US Fed tapering as early as next week, which in turn would signal the bottoming out of global interest rates.

Lisbona said the year’s low of 5,562 could be the bears’ next target.

Market breadth was very negative, with 31 advancers overwhelmed by 124 decliners while 36 stocks were unchanged.

The day’s biggest PSEi laggers were Ayala Land and Aboitiz Equity Ventures, which both fell more than 5 percent. SMC, Ayala Corp., Philex, SM Prime and Bloomberry all lost more than 3 percent while Robinsons Land, Megaworld and BDO were all down more than 2 percent.

Michael Gerard Enriquez, chief investment officer at Sun Life of Canada Philippines, said the uncertainty of US monetary policy was still a big concern for the market, with a “small” tapering anticipated this December while further tapering forecast next year.

Meanwhile, Enriquez said the recent third quarter reporting season for Philippine corporations was “nothing to be excited about,” translating to lackluster market performance. Doris C. Dumlao