Wednesday, September 19, 2018
Close  
  • share this

Stocks enter bear territory

Intraday low puts decline from record high in January 2018 at 20%
/ 05:11 AM June 20, 2018

The local stock barometer entered bear territory in intraday trading on Tuesday as investors —mostly unnerved by the sharply depreciating peso and the escalating US-China trade war—dumped more equities ahead of a closely watched local central bank monetary setting.

At the close of trading, the main-share Philippine Stock Exchange index (PSEi) lost 101.5 points or 1.37 percent at a 15-month low 7,312.61, tracking the slump across US and regional markets. Foreign funds continued to exit the local market, resulting in P867.92 million in net foreign selling for the day.

ADVERTISEMENT

The index hit a low of 7,253.12 in intraday trade, marking a 20-percent drop from the main barometer’s record peak of 9,078.37 hit last January. For BDO Unibank chief strategist Jonathan Ravelas, this marked a reversal to bear market even if the PSEi managed to bounce a bit from the day’s low.

“We are currently in bear market territory,” Ravelas said.

Beyond the US-China trade tension, Eagle Equities president Joseph Roxas said investors’ biggest concern was the strengthening of the US dollar, in turn resulting in large outflows of global funds from emerging markets like the Philippines.

“The US economy is picking up so funds that came to Asia over the last 10 years because of the problems in America are now moving back to America. And because the dollar is strong, the peso is weak relatively,” Roxas said.

For foreign investors with remaining exposure in the local market, the sharp peso depreciation was a concern because this would shrink the value of their funds once these are exchanged into dollars to be repatriated to their home markets.

Market sentiment is also weak ahead of the Bangko Sentral ng Pilipinas’ monetary policy meeting on Wednesday, during which another 25-basis point increase in interest rate is expected.

“It looks like the ball is in the BSP’s hands now in their upcoming meeting (June 20) as we’ve been seeing the devastating effects of a weakening peso to the PSEi in the past few days,” Papa Securities analyst Gio Perez said.

Given the PSEi’s sour performance, Perez said it seemed like the PSEi was set to approach the next definitive level between 7,100 and 7,150, where the long-term uptrend began in early 2016.

With the weak momentum in the market, Perez said “it might only be a matter of time before we see this area.”

ADVERTISEMENT

All counters ended in the red, led by the financial, holding firm, services and mining/oil counters, which all slipped by more than 1 percent.

Value turnover stood at P6.89 billion. There were 125 decliners that overwhelmed 70 advancers while 47 stocks were unchanged.

LT Group led the PSEi’s decliners, losing 4.42 percent, while JG Summit, PLDT and Metro Pacific all lost over 3 percent.

SM Investments, the day’s most actively traded company, fell by 2.22 percent, while BDO and ICTSI all lost more than 2 percent. Metrobank, Ayala Corp. and Megaworld all slipped by over 1 percent.

Ayala Land, SM Prime, BPI, Meralco, GT Capital and Puregold also contributed to the day’s decline.

Among the few that bucked the day’s downturn were Jollibee and AEV, which gained by 2.45 percent and 1.97 percent, respectively.

Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, Local Stock
For feedback, complaints, or inquiries, contact us.
entertainment

Judge nixes Cosby request to step down; sentencing Monday

September 20, 2018 07:16 AM

sports

Career night

September 20, 2018 05:45 AM

newsinfo

No Duterte plan to pardon Palparan, says Malacañang

September 20, 2018 05:40 AM

newsinfo

DBM chief firm on DOH budget slash

September 20, 2018

business

ABS-CBN hit by data breach

September 20, 2018

business

PH market slips to bear territory

September 20, 2018



© Copyright 1997-2018 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.