Stocks snap rally on negative market sentiment
THE MAIN INDEX snapped its five-day winning streak on Wednesday, weighed down by the negative sentiment in Wall Street overnight due to lingering concerns on the United States’ trade war with China.
The bellwether Philippine Stock Exchange index (PSEi) slumped 0.51% or 37.49 points to 7,265.45 by closing bell yesterday. The broader all-shares index likewise dropped 0.6% or 26.70 points to 4,371.64.
“Seems like index wasn’t able to gather enough strength today to counter the negative sentiment from US markets dropping once again last night (recall how the index was able to power through yesterday to recover from its lows and even close in the green),” P2P Trade Online Sales Associate Gabriel Jose F. Perez said in an e-mail on Wednesday.
Regina Capital Development Corp. Managing Director Luis A. Limlingan noted that there have been lingering concerns over the previous sessions.
“One has been the sustainability of the high growth rate and corporate earnings of the world’s largest economy. Next is the impending tariffs that will hurt both US and China. Next is the impact of the rate hike. Finally is the stumbling price of oil, as the US has now become self sufficient,” Mr. Limlingan said in a mobile phone message.
US officials on Tuesday accused China of not changing its “unfair, unreasonable, and market-distorting practices.” The statement is seen to put further tension on US President Donald J. Trump and Chinese President Xi Jinping’s meeting at the G20 Summit in Argentina at the end of the month.
With this, the Dow Jones Industrial Average plunged 2.21% or 551.80 points to 24,465.64. The S&P 500 index shed 1.82% or 48.84 points to 2,641.89, while the Nasdaq Composite index retreated 1.7% or 119.65 points to 6,908.82.
Locally, only the industrials counter managed to eke out gains, adding 0.27% or 28.72 points to 10,665.83. The rest dropped, led by mining and oil which plummeted 5.03% or 437.16 points to 8,242.48. PXP Energy Corp. and Semirara Mining and Power Corp. dragged down the subindex after falling by 14.87% and 3.85%, respectively.
Holding firms slipped 0.98% or 71.32 points to 7,153.65; services went down 0.8% or 11.35 points to 1,391.49; property dipped 0.53% or 18.83 points to 3,493.10; while financials was lower by 0.35% or 6.01 points to 1,704.82.
Some 902.68 million issues valued at P7.06 billion switched hands, higher than the previous session’s P6.92 billion. Decliners were about double the advancers, 127 to 64, while 48 names were unchanged.
Foreign investors went back to selling their holdings, recording net foreign outflows of P70.26 million against Tuesday’s net purchases of P526.01 million.
P2P Trade’s Mr. Perez noted that the PSEi may see “some reprieve” in the next session, given that Dow futures were up by 100 points yesterday afternoon.