PSEi falls to 6,300 level as BoP deficit widens

Philippine stocks slid further on Tuesday, with the main index falling to the 6,300 level, following weak data on the country’s external position and amid heightened cautiousness after Moody’s cut the United States’ credit rating.

The bellwether Philippine Stock Exchange index (PSEi) fell by 1.85% or 119.51 points to close at 6,335.33, while the broader all shares index dropped by 1.19% or 45.09 points to 3,720.57.

This was the PSEi’s lowest close in three weeks or since its 6,252.19 finish on April 29. The index has now ended in the red for five consecutive sessions.

“The local market plunged as investors dealt with the further widening of the Philippines’ balance of payments (BoP) deficit last April, which hit USD 5.52 billion,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “Investors also digested the 10% drop in new vehicle sales in the Philippines, taking it as a sign of challenged consumption in the country.”

The Bangko Sentral ng Pilipinas said on Monday that the country’s BoP deficit widened to USD 2.56 billion in April from the USD 639-million gap in the same period last year and the USD 1.97-billion shortfall in March as the government paid back its external debt.

For the first four months, the country’s external position was at a USD 5.52-billion deficit, wider than the USD 401-million gap last year.

“Philippine shares extended their decline as investors grew more wary, opting to scale back their holdings after initial optimism waned following Moody’s US downgrade,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

On Friday, Moody’s lowered the US sovereign credit rating to “Aa1” from “Aaa” amid concerns over the country’s growing USD 36-trillion outstanding debt.

Asian stocks rose on Tuesday as investors took stock of the debt load of the world’s biggest economy and awaited trade deals, Reuters reported. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.33% higher, hovering near the seven-month high touched last week.

All sectoral indices closed lower on Tuesday. Services sank by 2.2% or 47.54 points to 2,107.80; financials went down by 1.98% or 47.66 points to 2,350.33; holding firms declined by 1.83% or 100.21 points to 5,375.35; mining and oil shed 1.64% or 151.05 points to end at 9,033.68; property retreated by 0.98% or 22.41 points to 2,249.85; and industrials decreased by 0.47% or 43.54 points to 9,037.10.

“LT Group, Inc. was the day’s index leader, climbing 1.14% to PHP 12.46. International Container Terminal Services, Inc. was the day’s worst index performer, dropping 3.85% to PHp 400,” Mr. Tantiangco said.

Value turnover went up to PHP 7.32 billion on Tuesday with 1.35 billion shares traded from the PHP 6.19 billion with 755.08 million issues exchanged on Monday.

Decliners overwhelmed advancers, 126 versus 62, while 55 names closed unchanged.

Net foreign selling grew to PHP 886.21 million on Tuesday from PHP 223.77 million on Monday. — Revin Mikhael D. Ochave