PSE index sinks to 7,500 level on rising US yields

THE MAIN INDEX dropped to the 7,500 level on Wednesday, tracking global markets spooked by the continued rise in US yields.

The Philippine Stock Exchange index (PSEi) failed to hold early morning gains as it dropped 0.55% or 42.45 points to close at 7,557.91 yesterday, marking a fifth consecutive day of decline.

The broader all-shares index also gave up 0.48% or 22.34 points to finish at 4,595.43.

“Our index fell today below the 7,600 level as the 10-year US Treasury yield touched 3%, the highest level since 2014. Investors are liquidating shares since valuations have been really high since we peaked at 9,078,” Timson Securities, Inc. trader Jervin S. de Celis said in a mobile phone message on Wednesday.

Wall Street dropped sharply on Tuesday as warnings by bellwether companies of higher costs reverberated as the benchmark US 10-year Treasury yield pierced the 3% level for the first time in four years.

The Dow Jones Industrial Average fell 424.56 points or 1.74% to 24,024.13; the S& P 500 lost 35.73 points or 1.34% to 2,634.56; and the Nasdaq Composite dropped 121.25 points or 1.70% to 7,007.35.

Asian indices mirrored this downtrend, staying mostly in the red yesterday.

Regina Capital Development Corp. Managing Director Luis A. Limlingan also noted that the series of poor corporate earnings weighed on investor sentiment.

Local sectoral indices bled. Services fell by 1.51% or 23.56 points to 1,529.28, followed by industrials which slipped 0.93% or 101.30 points to 10,777.59.

Holding firms gave up 0.68% or 51.77 points to 7,489.06; mining and oil dipped 0.48% or 50.48 points to 10,292.65; financials went down by 0.27% or 5.45 points to 1,959.12; while property declined by 0.17 point to 3,514.67.

Value turnover stood at P6.21 billion after 1.7 billion issues switched hands. This is slightly higher than the P6.53 billion the market saw in the previous session.

Decliners outpaced advancers, 125 to 61, while 49 issues ended flat.

Net foreign outflows more than doubled to P370.53 million on Wednesday versus Tuesday’s P175.32 million. Yesterday also marked the fifth straight day of net foreign selling for the market.

Moving forward, Timson Securities’ Mr. De Celis said that investors are just waiting for fresh leads that will move the market. “I guess our market is just really waiting for the BSP (Bangko Sentral ng Pilipinas) to tweak rates by next month to combat the rising inflation which is the main worry of market participants since the accelerating CPI (consumer price index) could be a signal of an overheating economy.”

Among the day’s losers were Manila Electric Co., which fell by 3.88% to P307 each, and International Container Terminal Services, Inc., down by 3.77% to P85.40 apiece. —