LOCAL stocks closed lower on Monday, mirroring Wall Street’s decline amid recession fears and as investors priced in the news of a budget overrun in PLDT, Inc.
The benchmark Philippine Stock Exchange index (PSEi) declined by 82.23 points or 1.26% to close at 6,414.27 on Monday, while the broader all-shares index lost 32.82 points or 0.96% to 3,367.31.
“The local market declined this Monday … due to negative spillovers from Wall Street fueled by recession fears in the US,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Plopenio said in a Viber message.
Wall Street declined for a third straight session on Friday as fears that the central bank’s campaign to fight inflation would tilt the economy into a recession, Reuters reported.
The Dow Jones Industrial Average fell by 281.76 points or 0.85% to 32,920.46; the S&P 500 lost 43.39 points or 1.11% to 3,852.36; and the Nasdaq Composite dropped 105.11 points or 0.97% to 10,705.41.
Last week, the US Federal Reserve raised its benchmark overnight interest rate by 50 basis points (bps) to the 4.25%-4.5% range and projected it could rise to 5%-5.25% next year.
The Fed has now hiked borrowing costs by 425 bps since March.
“Aside from the recession fears next year, investors were surprised by the recent news of PLDT where there was a budget overrun of PHP 48 billion. The stock now is down 19.35% and might go down further,” Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a Viber message.
In a disclosure on Friday, PLDT announced that it found an estimated budget overrun of no more than PHP 48 billion, which represents 12.7% of the total capital expenditure spent in four years.
According to the company, the budget overrun is going through internal forensics and discussions with principal vendors. It added that the investigation has not uncovered any “fraudulent transactions, procurement anomalies or loss of assets.”
On Monday, shares in PLDT closed 286 points or 19.35% lower to 1,192 each. Shares in the company were sold at an intraday low of 1,187 apiece, which is also its new 52-week low.
Most of the sectoral indices closed lower on Monday except property, which increased by 32.7 points or 1.17% to end Monday’s session at 2,823.60.
Meanwhile, services slumped by 99.14 points or 5.98% to close at 1,557.89; financials declined by 116.03 points or 0.97% to 1,628.44; industrials lost 85.21 points or 0.91% to 9,187.34; holding firms went down by 30.13 points or 0.47% to 6,316.78; and mining and oil inched down by 5.34 points or 0.05 to close at 10,160.49.
Value turnover surged to PHP 18.72 billion on Monday with 1.31 billion shares changing hands from PHP 7.31 billion with 558.77 million issues traded on Friday. Decliners overwhelmed advancers, 123 to 55, while 45 names closed unchanged.
Net foreign selling climbed to PHP 1.01 billion on Monday from PHP 148.81 million seen the previous trading day.
Mercantile Securities’ Mr. See placed the PSEi’s support at the 6,150, 6,250 and 6,400 levels and resistance at 6,660 and 6,800 levels. — Justine Irish D. Tabile
This article originally appeared on bworldonline.com