Local shares drop further as conflict continues

Philippine shares dropped further on Thursday as the conflict in the Middle East raged on and ahead of the speech of US Federal Reserve Chair Jerome H. Powell overnight.

The Philippine Stock Exchange index went down by 49.11 points or 0.78% to close at 6,219.16 on Thursday, while the broader all shares index declined by 19.61 points or 0.57% to end at 3,365.79.

“The index fell in today’s session due to heightened cautiousness and risk-off sentiment among investors following fresh developments in the Middle East, as well as the resurgence of the sell-off in bond markets overnight,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail on Thursday.

“Trading opened and stayed in the red territory for the whole session as the aforementioned headwinds weighed on sentiment. The ongoing tension in the Middle East kept many on the sidelines as well,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio likewise said in a Viber message.

Egypt agreed to reopen its border crossing with the Gaza Strip to allow aid to reach Palestinians, the US said, as the humanitarian crisis worsened for the 2.3 million people trapped in the enclave and anti-Israel protests flared across the Middle East, Reuters reported.

Selling pressure continued amid a rise in US Treasury yields and as oil prices exceeded the USD 90-per-barrel mark again amid the war in the Middle East, Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said.

The yield on 10-year Treasury notes was up 6.4 basis points to 4.966%, touching its highest since mid-2007, Reuters reported.

US crude eased 0.16% to USD 88.18 per barrel and Brent was at USD 91.11, down 0.43% on the day.

“Selling pressure ramped up through the day, as investors likely trimmed exposures ahead of a speech by Fed chair Powell later tonight. For tomorrow, we are likely to see reactive moves to overnight developments,” Mr. Mercado added.

Fed Chair Jerome Powell will take the podium in New York on Thursday with his colleagues at the US central bank in apparent agreement to hold interest rates unchanged at their next meeting in two weeks.

At home, almost all sectoral indices dropped on Thursday. Financials went down by 28.47 points or 1.58% to 1,770.99; services fell by 20.84 points or 1.35% to 1,520.26; industrials dropped by 91.34 points or 1.02% to 8,824.68; mining and oil declined by 22.80 points or 0.21% to 10,830.69; and holding firms decreased by 10.41 points or 0.17% to 5,897.06.

Meanwhile, property climbed by 3.81 points or 0.14% to 2,656.40.

Value turnover went down to PHP 4.24 billion on Thursday with 575.68 million shares changing hands from the PHP 5.12 billion with 1.12 billion issues seen on Wednesday.

Decliners outnumbered advancers, 117 versus 50, while 53 shares closed unchanged.

Net foreign selling climbed to PHP 524.69 million on Thursday from PHP 32.59 million the previous day. — SJT with Reuters