PSEi retreats on US economy fears

The stock market nearly stumbled out of the 6,000 area on Thursday after the United States central bank’s serious concerns on the American economy dampened investor sentiment.

The benchmark Philippine Stock Exchange index (PSEi) declined by 0.61 percent or 36.72 points to end at 6,005.40 after spending much of the trading day below that level, while the wider All Shares shed 0.51 percent or 18.30 points to finish at 3,573.06.

Philstocks Financial Inc. research analyst Japhet Tantiangco attributed the slide to investors digesting the Federal Reserve’s (Fed) downbeat assessment of US domestic output this year.

In the minutes of the July meeting of the Fed’s rate-setting Federal Open Market
Committee released on Wednesday (Thursday in Manila), central bank officials voiced fears that the US economy would need more aid to weather the coronavirus downturn as provisions of a key US spending measure expired.

Tantiangco also said the lack of positive cues in the country’s ongoing health and economic crises prompted investors to take profits.

He also noted the tepid trading during the day — net value turnover hit P3.95 billion, below the year-to-date average of P5.86 billion — which “implies that market uncertainties are keeping many investors on the edge.”

Net foreign selling of P357.3 million also contributed to the decrease, the analyst said.
Diversified Securities Inc. trader Aniceto Pangan also blamed the decline on the net foreign selling and thin trading amid the continued spread of the coronavirus disease 2019 (Covid-19) in the country.

As of Thursday, the number of confirmed Covid-19 cases in the country grew by 4,339 to 178,022, of which 61,025 are active. Of the total, 114,114 have recovered and 2,883 succumbed to the highly infectious respiratory disease, which first emerged in the city of Wuhan in China’s central Hubei province and has spread to more than 200 countries and territories.

Wall Street ended in the red in response to the Fed minutes, with the Dow Jones, S&P 500 and Nasdaq losing 0.31 percent, 0.44 percent and 0.57 percent, respectively.

Asian markets also bled, with Tokyo down 1 percent, Shanghai losing 1.3 percent, Hong Kong shaving off 1.52 percent, Seoul plunging by 3.66 percent, Jakarta shedding by 0.42 percent, Singapore tumbling by 1.21 percent, Bangkok slipping by 0.5 percent and Ho Chi Minh falling by 0.35 percent.

All local sectors fell, with mining and oil shedding the most at 2.37 percent.

Total volume turnover was at 1.5 billion shares, valued at P4.05 billion.

Decliners edged out advancers, 131 to 64, with 46 securities unchanged.

WITH A REPORT FROM AFP

Source: TheManila Times