The Philippine Stock Exchange index (PSEi) declined below the 7000 level on Monday as it closed at 6,979.06, down 1.25 percent or 88.67 points from Friday’s close. Analysts said the external and internal concerns loom the local market and investors took valuations.
Here are three fast facts on PSEi declining below 7000 level on Monday.
1. The Philippine Stock Exchange index took its cue from the negative performance of US stocks over the weekend.
There was volatility in the Wall Street on Friday, with the Dow Jones Industrial Average down at 0.19 percent or 35.89 points at 18,867.93. The S&P 500 declined by 0.24 percent or 5.22 points at 2,181.90.
2. Foreign selling continued to loom at the PSE.
Lexter Azurin, assistant vice-president and head of research at Unicapital Securities, Inc., said in a Business World report that they are seeing continued net foreign selling for the past few days. Azurin added that the outflows of these funds were driven by the local equities’ expensive valuations compared to the rest of the region.
Meanwhile, Luis Limlingan, managing director of Regina Capital Development Corp., said that since the stock market rebounded last week, investors saw an opportunity to profit from it. He added that the lack of catalysts turned the investors’ attention to the performance of US stocks and the higher possibility of US Federal Reserve to hike interest rates.
3. Corporate earnings report also had some weakness. This led to investors having negative sentiments.
Azurin added that in terms of corporate earnings, there are some weaknesses. Plus, most of the investors are liquidating softer positions because they are having a difficult time justifying current valuations.
Justino Calaycay Jr, head of marketing and research at A&A Securities Inc., however, said that these negative sentiments may soon dissipate. In a Manila Times report, he said that the negative flow of foreign funds should somewhat dissipate even as these funds' main driver rest more on external factors such as the Fed rate action and the US economy.
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