The local stock barometer slipped below the 7,300 mark yesterday as global investor sentiment turned sour due to concerns on the implementation of US President Trump’s reform program alongside commodity market jitters.
Tracking an overnight selloff in Wall Street, the Philippine Stock Exchange index (PSEi) lost 68.38 points or 0.93 percent to close at 7,254.93.
Foreign investors were net sellers at the stock market, resulting in net outflows of P958 million.
“A confluence of factors led to the PSEi’s decline. US stocks suffered their worst single session since October as financials took a serious beating, their worst since the initial Brexit-driven downdraft. Continuing fallout from the dovish/less hawkish FOMC (Federal Open Market Committee), anxiety over the Trump agenda ahead of Thursday’s key vote on healthcare and fundamental weakness in autos/auto lenders and energy as oil revisited new lows for the year added to the overall negative tone,” said Luis Gerardo Limlingan, managing director at local stock brokerage Regina Capital Development.
Overnight, the closely watched Dow Jones Industrial index slid by 237.85 points or 1.14 percent to close at 20,668.01, casting gloom on global markets.
“The inability of reflation trades to perform following last week’s dovish (US Federal Reserve) Fed hike coalesced into a capitulation overnight. A mix of factors contributed, including deterioration in US policy expectations and supply headwinds to commodity markets. However, data surprises from around the world remain robust, suggesting that this is likely a tactical consolidation of market positioning rather than the start of a more serious reassessment of the global business cycle,” Citigroup said in a research note.