PSEi drops further on lingering overseas concerns

THE MAIN INDEX suffered another sell- off on Tuesday, weighed down by lingering concerns on the tensions surrounding the United States and Russia.

The 30- member Philippine Stock Exchange index ( PSEi) dropped 1.86% or 146.86 points to close at 7,723.39 yesterday. The broader all-shares index likewise lost 1.57% or 75.32 points to 4,695.96.

“Philippine markets were sold down due to the tensions developing between Russia, US, and Syria. Traders weighed on weekend strikes in Syria and potential for additional US sanctions against Russia,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

Summit Securities, Inc. Harry G. Liu, meanwhile, said that fund managers are currently digesting the effects of these geopolitical tensions to global markets, noting that the implications of the trade war between the US and China will be more cause for concern once the ongoing rift between US and Russia settle down.

“I presume that world leaders and fund managers will digest what will happen to the trade war, where will the balance come in. Everybody’s still trying to figure out what the effects will be,” Mr. Liu said in a phone interview yesterday.

The bloodbath trickled down to all sectoral counters, with the financials counter dropping 2.26% or 45.82 points to 1,975.27. The mining and oil sector shed 2.08% or 231.35 points to 10,864.71; holding firms gave up 1.78% or 140.41 points to 7,726.81; services fell 1.76% or 28.54 points to 1,589.34; industrials went down 1.39% or 155.88 points to 11,052.50; while property declined 1.31% or 47.58 points to 3,567.38.

Declining stocks prevailed for the day at 161 issues versus 57 that gained and 34 that remained unmoved.

Value turnover picked up, ending at P7.03 billion against Monday’s P4.77 billion, after some 1.23 billion issues switched hands.

Foreign investors turned sellers, reversing Monday’s P139.71- million net purchases for net foreign outflows of P453.85 million.

Summit Securities’ Mr. Liu said the market is still looking for a support level between 7,500 and 7,700 that will hold in the medium term.

“We should see some improvements in the coming weeks... Investors are just adapting a sideline attitude, they’re waiting for the right timing to come in,” he added.

In contrast, Wall Street regained momentum overnight, with the Dow Jones Industrial Average climbing 0.87% or 212.90 points to 24,573.04. Nasdaq Composite index added 0.70% or 49.64 points to 7,156.29, while the S&P 500 also ended in the green with a gain of 0.81% or 21.54 points to 2,677.84.

Most Asian indices stayed in positive territory on Tuesday, trekking developments of its global counterparts.