PSEi sinks to 5,900 range on growth worries

The main stock benchmark sank to the 5,900 level on Wednesday as investors weighed weak Philippine growth prospects and geopolitical concerns, with global market volatility also affecting risk appetite. 

The Philippine Stock Exchange index (PSEi) fell by 1.51% or 90.84 points to close at 5,916.94, while the broader all shares index sank by 1.26% or 42.26 points to end at 3,300.26.

This was the PSEi’s worst close in more than three months or since June 11’s finish of 5,910.06.

“The local index closed lower, retreating to the 5,900 level, amid concerns over potentially slower third-quarter economic growth adding to the uncertainty. The ongoing conflict between the US and Iran also weighed on inves-tor confidence, contributing to today’s broad sell-off. Market sentiment remained cautious as investors assessed the potential impact of weaker growth and heightened geopolitical risks,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market plunged further, breaching the critical 6,000 support line as local and global treasury yields continue to rise, making bonds more attractive relative to equities. Investors are also taking a cautious stance while waiting for the Federal Reserve’s policy decision. Finally, elevated global oil prices and the peso’s weak position weighed on the market,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tanti-angco said in a Viber message.

Economy Secretary Arsenio M. Balisacan said on Tuesday that economic growth likely took a hit this quarter as persistent rains disrupted work and classes, but could rebound in the fourth quarter as infrastructure spending accelerates.

Meanwhile, oil prices retreated on Wednesday, with Brent crude futures down 0.6% at USD 108 a barrel after rising 2.9% on Tuesday, as reports that Saudi Arabia was offering additional crude cargoes via Oman eased concern about the scale of supply disruptions, Reuters reported.

Majority of sectoral indices closed lower on Wednesday. Services declined by 3.18% or 105.36 points to 3,208.25; industrial retreated by 1.26% or 99.39 points to 7,773.87; property went down by 0.89% or 16.50 points to 1,830.77; mining and oil fell by 0.84% or 179.51 points to 21,317.54; and financials shed 0.7% or 13.10 points to 1,845.51.

Meanwhile, holding firms edged up by 0.05 point to 4,180.51.

Decliners overwhelmed advancers, 139 to 54, while 58 names were unchanged.

“DigiPlus Interactive Corp. was the day’s index leader, climbing 1.51% to PHP 8.73. Semirara Mining and Power Corp. was the main index laggard, falling 5.01% to PHP 16.70,” Mr. Tantiangco said.

Value turnover went up to PHP 5.89 billion on Wednesday with 612.54 million shares traded from the PHP 5.35 billion with 582.15 million issues that changed hands on Tuesday.

Net foreign selling rose to PHP 994.69 million from PHP 480.82 million in the previous session. — Alexandria Grace C. Magno