PSEi dips over fears of choppy US recovery

LOCAL SHARES declined on Thursday to mirror the drop in Wall Street the night before as investors worried over a possible choppy economic recovery in the United States.

The benchmark Philippine Stock Exchange index ( PSEi) gave up 46.92 points or 0.79% to close at 5,845.80. The broader all shares index let go of 23.19 points or 0.65% to end at 3,521.95.

“Local shares retreated… as market participants struggled to shake off worries about a lack of a coronavirus aid package and rising coronavirus disease 2019 (COVID-19) cases,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

Reuters quoted US Federal Reserve Vice Chair Richard Clarida as saying the US economy remains in a “deep hole” of joblessness and weak demand, and called for more fiscal stimulus, noting that policymakers “are not even going to begin thinking” about raising interest rates until inflation hits 2%.

Cleveland Federal Reserve Bank President Loretta Mester echoed Mr. Clarida, saying that the US remains in a “deep hole, regardless of the comeback we’ve seen.”

The COVID-19 outbreak in the US remained the worst around the world on Thursday, reaching 6.93 million cases with 201,909 deaths, based on data from Johns Hopkins University.

Statements from Fed officials spooked investors, pushing US markets lower on Wednesday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices fell 1.92%, 2.37% and 3.02%, respectively.

This negative sentiment spilled over to Asian markets on Thursday.

MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 1.93% in the afternoon session on broad losses across the region, putting it on track for its biggest daily drop since July 16, Reuters reported.

Rising tensions between North and South Korea influenced market trading, Philstocks Financial, Inc. Research Associate Claire T. Alviar said.

“Negative sentiments abroad continued to be watched by investors since there is a lack of catalysts at home,” Ms. Alviar said in a text message.

Most sectoral indices at the PSE ended Thursday’s session with losses. Mining and oil erased 130.56 points or 2.19% to 5,813.98; holding firms lost 104.02 points or 1.68% to 6,054.32; property slid 27.18 points or 0.99% to 2,706.63; and financials trimmed 3.95 points or 0.34% to 1,138.53.

On the other hand, services increased 9.97 points or 0.68% to 1,456.69, and industrials added 21.27 points or 0.27% to 7,893.72 at the close of trading.

Value turnover on Thursday stood at P4.05 billion with 1.07 billion issues switching hands, slightly lower from the previous day’s P4.45 billion with 1.47 billion issues.

Decliners outnumbered advancers, 120 against 76. Some 31 names ended unchanged.

Net foreign outflows jumped to P292.84 million from P95.86 million the previous day.