PH stocks hit lowest level in 8 months

Local stocks slid below the 7,000 mark while the peso hit a seven-year low on Friday as most emerging markets grappled with fresh “Trump tantrum,” as post-US election policy jitters triggered risk aversion.

The main-share Philippine Stock Exchange index shed 206.78 points or 2.88 percent to close at an eight-month low of 6,975.09.  This marked the lowest level hit since ending at 6,948.18 on March 9, 2016.

The day’s decline marked the PSEi’s worst performance since sliding by 4.37 percent on Jan. 11, 2016.

In a research note,  titled “EM hit by Trump Tantrum,” Citigroup said boosted by expectations of a rotation in the US policy mix—with expansionary fiscal policy likely taking over from monetary policy—the 10-year US dollar treasury yields had risen in less than 48 hours by 45 basis points while the US dollar strengthened by 3 percent. “The volatility shock from such price action will likely have an enduring impact on investor sentiment,” Citi said.

All counters tumbled, led by holding firms which slid by 3.46 percent. Industrial, services and property slid by over 2 percent.

Value turnover for the day hit P9.5 billion. There was P2.4 billion in net foreign selling. There were 152 decliners, overwhelming 28 advancers.

The PSEi was weighed down by AC which fell by 6.25 percent while GTCAP, DMCI and Globe fell by over 5 percent.

Metrobank, Megaworld and AEV slipped by over 4 percent while ALI, PLDT and Jollibee slid by over 3 percent.

URC, ICTSI, SMIC, MPI, Security Bank and JG Summit fell by over 2 percent.

“As the global opportunity cost of capital rises alongside US Treasury yields, and as the dollar surges, investors once again will fear another exodus of capital from EM. While the pace of the US treasury curve steepening is unlikely to be this rapid for much longer, investors are advised not to consider fading this move just yet.”