Stocks down on global recession jitters

The local stock barometer slid to the 7,800 level on Monday as fresh global growth jitters caused a bloodbath across regional markets.

The main-share Philippine Stock Exchange index (PSEi) lost 150.4 points, or 1.88 percent, to close at 7,863.02.

Ron Acoba, chief investment strategist at equities research provider Trading Edge, had expected a temporary pullback for the PSEi this week following the 1.9-percent drop in the broader S&P 500 Index on Friday.

“Nonetheless, the dovish monetary stance both in the United States and Philippines may lead the PSEi to retest its 2019 high. From a technical standpoint, the index’s general tilt remain on the upside as long as it trades above its recent reaction low of 7,700,” Acoba said.

For the next 12 months, Acoba noted that the consensus target for the PSEi was at 8,520.

“With the one-year government bond yield at 6.069 percent, it is logical therefore to start taking profits at 8,030 and to switch to a one-year government bond. With a risk of an impending recession in the United States in the next 18 months as suggested by the yield inversion, any move toward the 8,030 to 8,500 may be taken as a window to taper one’s equity holdings,” he said.

All counters ended in the red but the market was weighed down most by the holding firm and mining/oil counters, which both fell by more than 2 percent.

The financial and property counters both slipped by over 1 percent, while the industrial and services counters also declined.

The sell-off was mostly driven by domestic players as foreign investors posted a net buying position of P666.9 million.

Value turnover remained thin at P5.39 billion.

There were 142 decliners that overwhelmed 47 advancers while 41 stocks were unchanged.

JG Summit lost 4.27 percent while SM Investments, BPI and PLDT all lost more than 3 percent.

Ayala Land, GT Capital, Megaworld, Meralco and AGI all slipped by more than 2 percent.

BDO, Ayala Corp., Metro Pacific and Metrobank all declined by over 1 percent, while SM Prime, ICTSI, URC and RLC all firmed up.

Among the notable decliners outside the PSEi were Vista Land (-2.32 percent) and Holcim (-0.19 percent), which both declined in relatively heavy volume.