Duterte’s last SONA fails to excite market as PSEi plunges to 6,300

The stock barometer dived to the 6,300 territory in thin trade on Monday, ending at a two-month low, ahead of President Duterte’s last State of the Nation Address (SONA).

The Philippine Stock Exchange index (PSEi) tumbled by 148.13 points, or 2.27 percent, to close at 6,372.61, tracking gloomy sentiment across the region. This marked the PSEi’s lowest finish since May 26 this year.

“Investors sold out of the market as investors awaited the final SONA … Most [expected] the president to discuss how he would shepherd the country out of the pandemic,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

“The other narrative theme will focus on the administration’s heirloom legacies,” he said.

Limlingan said investors also awaited the latest guidance from the US Federal Reserve, which would meet later in the week.

“Federal Reserve officials aren’t expected to signal a reduction in support for the US economy when they meet, but will debate how to scale back massive bond purchases when the time comes. Pressure on (Fed) chair Jerome Powell to start the taper sooner rather than later has probably been eased by the recent slide in bond yields, as investors worry the spreading Delta coronavirus variant could sap the recovery,” Limlingan said.

At the same time, he said the second quarter earnings season would kick off fully this week, with several index heavyweights set to release reports.

Joseph Roxas, president of Eagle Equities, said the market may have been unnerved by the big decline of equities in Hong Kong.

Hong Kong’s Hang Seng index fell by 989.77 points or 3.62 percent, dragging down regional markets, amid China’s crackdown on big technology companies.

At the local market, all counters ended lower, led by the financial, holding firm, services and property counters, which all fell by over 2 percent.

The industrial and mining/oil counters both slipped by over 1 percent.

Value turnover was meager at P4.15 billion. Foreigners continued to dump shares, resulting in a P630.5-million net outflow. INQ