PSEi sinks to 6,500 level amid global volatility

LOCAL STOCKS stumbled on Thursday, with the main index sinking to the 6,500 level, amid global volatility and a lack of fresh leads to prompt a “Santa Claus” rally.

The bellwether Philippine Stock Exchange index ( PSEi) plunged by 1.48% or 99.19 points to end at 6,587.17, its lowest level in almost a year.

With less than a week of trading left for 2016, the PSEi remains deeply in the red for the year from its end- 2015 close of 6,952.08.

The all-shares index also fell 1.22% or 49.94 points to 4,036.50 points yesterday.

Analysts said the lack of fresh leads, coupled with volatile movements in financial markets across the globe, caused the main index to plunge yesterday.

“The volatility in the global market and lack of marketmoving news further discouraged investors,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a text message.

“It’s still due to negative sentiment. We’re seeing continued net foreign selling in the market. It’s a combination of unattractive valuations and domestic concerns (political) aren’t helping. Foreign investors are shifting to other markets that are more attractive than the Philippines,” Lexter A. Azurin, Unicapital Securities, Inc. research head, said in a text message.

Luis A. Limlingan, managing director at the Regina Capital Development Corp., said Asian markets also tracked US indices lower.

Global markets have been on a decline following the US Federal Reserve’s decision last week to raise interest rates for the first time in a year, coupled with its hawkish tone on more rate hikes next year.

All sectoral indices ended in the red yesterday. Industrials slumped 2% or 211.22 points to 10,326.35; holding firms stumbled 1.75% or 119.47 points to 6,696.08; mining and oil dropped 1.16% or 140.68 points to 11,908.25; property went down 1.11% or 33.16 points to 2,946.01; financials fell 1.06% or 17.44 points to 1,621.10; and services slipped by 0.68% or 8.78 points to end the session at 1,268.42.

Value turnover amounted to P6.61 billion, higher than Wednesday’s P5.28 billion, as 624.01 million shares changed hands.

Losers outnumbered advancers, 123 to 43, while 46 issues ended flat.

Foreigners continued to dump shares on Thursday, with net selling recorded at P1.13 billion, rising from the P756.41 million seen on Wednesday.

Southeast Asian stock markets were subdued on Thursday, tracking Asian peers. Asian shares also struggled following an uninspiring session on Wall Street, with MSCI’s broadest index of AsiaPacific shares outside Japan hitting its lowest in a month.

Singapore shares hit their lowest in more than three weeks and were headed for a fourth straight session of declines. Malaysian shares slipped to their lowest in more than two weeks, while Jakarta fell for an eighth straight session, dragged down by financial and consumer stocks. •