PSEi slips below 7,000 anew

THE LOCAL stock barometer slipped below the 7,000 mark in thin trade on Monday as uncertainties on US interest rates and the Chinese economy curbed risk-taking.

The Philippine Stock Exchange index fell by 124.96 points or 1.77 percent to close at 6,926.82, tracking mostly sluggish markets across the region.

This weak sentiment did not come as a surprise following the sharp decline in Wall Street on Friday as the mixed bag of US jobs data only heightened uncertainties on whether the US Federal Reserve will hike interest rates this September. On Friday, the Dow Jones Industrial Index fell by 1.66 percent.

At the same time, China’s stock market reopened after a long weekend break only to decline by another 2.52 percent on Monday. China’s financial markets were closed on Thursday and Friday in celebration of the end of World War II.

At the local stock market, the day’s decline was led by the holding firm counter which slumped by 2 percent while all other counters dropped by over 1 percent.

Value turnover was thin at P4.06 billion as foreign investors continued to be net sellers at the local bourse. There was net foreign selling of P220 million at the market.

There were 3.6 times as much decliners (131) than advancers (36) while 42 stocks were unchanged.

Investors dumped shares of JG Summit and Bloomberry, which both fell by over 4 percent while AC and ALI also faltered by over 3 percent. PLDT and ICTSI dropped by over 2 percent while SMIC, GTCAP, Metrobank and MPI declined by over 1 percent.

BDO, URC, SM Prime, BPI, LTG, Globe and AGI also slipped.

Outside of PSEi stocks, RRHI (-2.15 percent), Puregold (-1.23 percent) and DNL (-0.18 percent) declined in relatively heavy trade.

Local stock brokerage DA Market said while the index had hit a short-term bottom close to the 6,600 level, further volatility may be expected until the index establishes a new firm support.

“Considering uncertainty persists in external markets, risk-off sentiment can lead to sell-offs; in the case of panic, indiscriminate, exaggerations in valuations may occur,” the brokerage said.

Resistance levels are seen to remain between 7,000 and 7,265.

“Current market conditions call for a nimble short-term trader with tight stops or a value investor to cherry-pick market exaggerations. The investor may also decide to wait for bottoming/recovery signals on the index or individual stock,” the brokerage said.