External concerns continue to dampen share prices

MANILA, Philippines - Investors shied away from the local bourse yesterday amid the lingering impact of an impending hike in US interest rates and the continued negative effects of China’s economic slowdown.

The benchmark Philippine Stock Exchange index (PSEi) closed 70.08 points or 0.99 percent lower to finish at 7,000.11 while the broader All Shares index ended at 4,040.86, down 38.21 points or 0.93 percent.

All other indexes closed in negative territory, with the Industrial, Services and Property barometers posting the biggest declines.

Analysts said yesterday’s market action continues to reflect lingering concerns on external developments.

“Tuesday’s market action – across the entire Asian region – magnifies the impact that China has on the global economy. That and the impending hike in US interest rates after decades of a record low regime. Investors are now in the process rebalancing their portfolio in line with the diverging expectations in monetary policy stance between the US and the rest of the world,” said Justino Calaycay of Philstocks Financial.

He said there have been observations made by reputable institutions, both here and abroad, testifying to the strength of the domestic economy’s relative ability to weather these headwinds.

“But perception is a stronger force and at this point, the general view tends to be rather pessimistic. The slower pace of earnings – generally positive but not stellar – has kept investors digging their hands deeper into their pockets,” he said.

On the local front, Calaycay said investors would also be keeping a close watch on third quarter economic numbers and third quarter corporate earnings reports.

Value turnover hit P6.38 billion, with decliners outnumbering advancers, 128 to 39, while 48 stocks were unchanged.