Stocks plummet to lowest in one year

The stock market plunged to a fresh one-year low yesterday as heavy selling ensued due to lack of market catalysts, analysts said.

The Philippine Stock Exchange index (PSEi) nosedived 119.11 points, or 1.54 percent, to close at 7,600.36, while the broader All Shares index shed 59.32 points, or 1.26 percent, to close at 4,617.77.

Yesterday’s close was the lowest level since the benchmark in- dex finished at 7,588 on April 24, 2017, according to Regina Capital Development Corp. business development head Luis Limlingan.

“Philippine markets continued to sell down as investors continued to stay on the sidelines without any catalysts from regional markets,” Limlingan said.

Asian stocks were mostly stable yesterday compared to previous sessions, but it was not enough to stop the bloodbath in local share prices.

Tuesday’s finish puts the PSEi on a second consecutive day of decline.

Most local counters shed more than one percent, except for the services sector which lost 0.72 percent.

Leading the bloodbath were property firms, with the sector dropping 2.03 percent, followed by the mining and oil and industrial counters which decreased 1.80 percent and 1.78 percent, respectively.

Market breadth was negative as decliners crushed advancers, 143 to 68, while 40 stocks were unchanged.

Value turnover improved slightly from the previous day, but remained thin at P6.05 billion.

“Without much positive news in the short-run, the PSEi may trade sideways along its present 7,500-7,800 range. Besides, a quick recovery may be weighed

down by negative economic and political factors (both domestic and external). Bargain hunting should, thus, be selective and tempered by longer holding periods,” according to FMIC and UA&P Capital Markets Research.

Meanwhile, world stocks steadied on Tuesday after three sessions of losses, thanks to strong earnings from the likes of Google and as a rise in US bond yields towards the key three percent level stalled, while oil prices stretched to fresh highs above $75 a barrel.

European stocks opened broadly higher with bluechip stock markets in London and Frankfurt 0.3 percent higher, while shares in Paris were flat.

Markets brushed off further signs that Europe’s biggest economy Germany is losing some of its momentum, with the Ifo business climate index falling in April.

In Asia, Japan’s Nikkei added 0.9 percent as a lower yen supported export-heavy firms and Chinese shares posted their strongest gains in two months.

That left MSCI’s world equity index marginally higher on the day after three days of declines.

The recovery in stocks came as bond markets also bounced back from a selloff. US 10-year Treasury yields came within striking distance of the key psychological barrier of three percent on Monday, a level in the past that has triggered market spasms.

“The US yield spike story has been a theme for the last 24 hours but we don’t expect a sharp surge as the US continues to be in a late economic cycle,” said Christin Tuxen, a currency strategist at Danske Bank.

Earnings, meanwhile, especially from the tech sector, were in focus after a turbulent few months for leading US tech firms.

Google parent Alphabet was up slightly in volatile after-hours trading on Monday after the tech giant reported a 73 percent jump in profits in the first quarter.