PSEi extends decline on US slowdown fears

Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Thu, 06 Dec 2018 16:21:37 +0000

THE stock market plunged anew on Thursday with analysts pointing to concerns over the US economy as continuing to dent investor sentiment.

The Philippine Stock Exchange index (PSEi) dropped by 1.25 percent or 95.58 points to close at 7,535.32 while the wider All Shares lost 0.95 percent or 43.24 points to finish at 4,530.92.

Investors are turning cautious given worries that the US economy could be headed for a slowdown, Timson Securities Inc. trader Jervin de Celis said.

“Our index has also been performing really well for the past few weeks after breaching several key resistance areas, so it isn’t surprising to see investors liquidating some positions amidst the news coming from the western market,” De Celis added.

The worries are being fueled by narrowing US bond spreads. An inversion, where yields of shorter-dated papers exceed long-term rates, has historically preceded a recession.

Diversified Securities Inc. trader Aniceto Pangan said sentiment was further weighed down by the US Fed’s “beige book” report that showed American business optimism had fallen in recent weeks.

The PSEi’s fall tracked a regional decline that was blamed on news that a top Huawei executive had been arrested in Canada, which fuelled fears over the prospects of a US-China trade truce.

Chinese tech shares were hammered with Hong Kong plunging 2.5 percent and Shanghai down 1.7 percent.

Tokyo slipped 1.9 percent, Taipei was 2.3 percent off, Sydney fell 0.2 percent, while Singapore sank 1.5 percent and Seoul gave up 1.6 percent.

In early European trade London dropped 0.8 percent, while Paris and Frankfurt dove more than one percent.

In Manila, all sectoral results ended in the red, with the property index down the most by 1.95 percent.

Volume turnover stood at 4.6 million issues valued at P7.18 billion.

Losers led winners, 113 to 74, while 50 issues were unchanged.

Wit a report from AFP

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