PSE index declines further as Wall Street sinks

LOCAL EQUITIES declined on Wednesday following weak US markets amid growing concerns among investors over uncertainties of the Trump administration’s economic direction.

The bellwether Philippine Stock Exchange index ( PSEi) slipped 0.93% or 68.38 points to 7,254.93.

The broader all shares index fell 0.82% or 36.34 points to 4,369.03.

“PSEi [ fell] following Wall Street due to doubt over Trump policies to boost economic growth,” Joylin F. Telagen, equity research analyst at IB Gimenez Securities, Inc., said in a text message on Wednesday, noting political concerns in the Philippines are also contributing to the tension.

Regina Capital Development Corp. Managing Director Luis A. Limlingan said US markets suffered their worst single session since October as financials took a beating, the worst since the initial Brexit-driven downdraft.

Wall Street fell sharply on Tuesday as investors worried that President Donald J. Trump will struggle to deliver promised tax cuts that propelled the market to record highs in recent months, with nervousness deepening ahead of a key health care vote.

The Dow Jones Industrial Average dropped 1.14% to end at 20,668.01 points, while the S&P 500 lost 1.24% to 2,344.02. The Nasdaq Composite fell 1.83% to 5,793.83.

“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,” Mr. Limlingan said in a text message.

All sub- sectors ended in the red. Services slumped 1.53% or 23 points to 1,475.41; holding firms slid 1.06% to 78.54 points to 7,269.26; financials dropped 0.86% or 16.01 points to 1,832.64; property fell 0.74% or 24.33 points to 3,227.44; mining and oil went down 0.51% or 61.73 points to 11,872.01; and industrials gave up 0.39% or 43.41 points to 10,972.52.

Decliners outnumbered advancers, 127 to 57, while 52 issues were unchanged.

Value turnover stood at P7.73 billion yesterday, slightly higher than the prior trading day’s P7.67 billion, as 1.28 billion shares changed hands.

Foreigners dumped shares yesterday, with net selling reaching P958.84 million, a reversal of Tuesday’s net purchases worth P77.80 million.

IB Gimenez’s Ms. Telagen said she expects the main index to consolidate at the 7,250 to 7,300 level with the downside risk of hovering at the 7,100 level this week.

“The market just can’t carry momentum heading into 2Q (second quarter) 2017 due to lack of any positive catalysts. Investors might have been slowing down in buying as earnings season is almost over and the market will now await for new cues,” Frank Gerard A. Barboza, equity trader at AP Securities, Inc., said via text. •