Index plunges anew on foreign selling

MANILA, Philippines - Foreign selling further depressed share prices, with the local market mirroring a sharp decline in Wall Street that is reeling from the potential pullout of US Federal Reserve’s stimulus measures.

The Philippine Stock Exchange index retreated 2.28 percent or 144.50 points to settle at 6,182.17, while the broader all shares index shed 2.52 percent or 98.64 points to 3,821.01.

The bellwether index dropped to as much as 6,122.29 but bargain hunting by foreign institutional investors allowed the main index to pare down losses.

“We continue to feel the heat of the selling given the continued jitters from overseas markets,” Astro C. del Castillo, managing director of First Grade Finance Inc., said in a phone interview.

Joseph Roxas, president of brokerage firm Eagle Equities Inc., said the market was pushed lower by aggressive foreign selling.

“The global market sell-off shows the influence of US Fed beyond US,” said brokerage firm DA Market Securities Inc.

On Thursday, Wall Street plunged as investors digested the US Fed’s plan to ease its $85-billion monthly bond purchases late this year and end the program in 2014 if the US economy further improves.

Blue chip Dow Jones industrial average shed 2.34 percent or 353.87 points to 14,758.32 while the broader Standard & Poor’s 500 index declined 2.5 percent or 40.74 points to 1,588.19.

Tapering off the stimulus program is seen to jack up interest rates, which encourages foreign funds to book profits in emerging markets and return to advanced economies.

“Fund managers continue to balance off investments in the global arena,” del Castillo said.

Asian shares closed mixed, with Japan’s Nikkei 225 adding 1.66 percent or 215.55 points to 13,230.13 as the yen weakened against the dollar that augurs well for exporters while Hong Kong’s Hang Seng index slipped 0.73 percent or 149.67 points to 20,233.20.

Locally, all counters were in the red, paced by mining and oil that slumped by a hefty 9.55 percent, dragged by Philex Mining Corp. (-11.42 percent) and Semirara Mining Corp. (-11.54 percent).

Roxas said mining and oil was weighed down by the slump in commodity prices.

US Fed’s announcement of the possible ending of the easy money era  alsoprompted investors to dump gold, whose prices sank to two-and-a-half year lows.

Decliners outplayed advancers, five to one, while 23 stocks did not change. The value of shares traded spiked to P12.96 billion from P7.57 billion on Friday.