By Arra B. Francia, Reporter
LOCAL SHARES fell on Wednesday, reflecting the steep decline of markets in the United States pulled down by fears of a recession alongside the return of trade war fears.
The bellwether Philippine Stock Exchange index (PSEi) snapped a two-day rally as it retreated 0.94% or 73.02 points to 7,630.90 yesterday. The broader all-shares index also shed 0.61% or 28.35 points to 4,574.16.
“Philippine shares felt the onslaught of one of the biggest reversals this year as US stocks fell sharply on Tuesday in the biggest decline since the October rout. Investors renewed concerns about a bond market phenomenon signaling a possible economic slowdown,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.
Investors were cautious about the fluctuating bond market, with the gap between short and long-term Treasury rates narrowing this week. The inversion of the yield curve is seen as a sign before almost every recession.
With this, Wall Street’s major indices bled overnight. The Dow Jones Industrial Average plunging 3.1% or 799.36 points to 25,027.07. The SP 500 index plummeted 3.24% or 90.31 points to 2,700.06, while the Nasdaq Composite index tumbled 3.8% or 283.09 points to 7,158.43.
Diversified Securities, Inc. Equities trader Aniceto K. Pangan also attributed the market’s performance to the drop in US markets, disregarding the slower inflation print for the month of November.
“Market corrected today…after US market was down heavily by almost 800 points, despite Philippine inflation rate eased to 6% year on year from 6.7% (in October),” Mr. Pangan said via text.
“The US market was mainly affected by the concerns on the no progress between US-China trade talks, as well as the hawkish stance of US Federal Reserve thereby flattening the short term from the long term yield curve difference indicative of slow growth scenario.”
Back home, four sectoral indices moved to negative territory, led by holding firms which went down 1.4% or 107.13 points to 7,545.26. Financials slipped 0.92% or 16.69 points to 1,798.07; property declined 0.78% or 29.74 points to 3,745.43; while services dipped 0.19% or 2.76 points to 1,437.42.
Meanwhile, the mining and oil counter gained 0.38% or 32.95 points to 8,606.05. Industrials added 0.1% or 11.24 points to 10,907.24.
Some 1.66 billion issues switched hands resulting in a value turnover of P8.32 billion, slowing from the previous session’s P11.49 billion.
Foreign investors turned net sellers, albeit at a meager amount of P28 million versus the previous session’s net purchases of P1.08 billion.
Decliners outpaced advancers by a hair, 98 to 96, while 34 names were unchanged.
Article source: https://www.bworldonline.com/stocks-drop-as-wall-st-sinks-on-recession-fears/