The Philippine Stock Exchange index (PSEi) slumped on Tuesday as it closed at 6,658.66, falling at 0.82 percent or 55.47 points. The local index drop to 6600 level was due to the decision of Bank of Japan (BoJ) to retain its monetary policy and geopolitical concerns causing investors to sell foreign funds heavily.
Here are three fast facts on PSEi slumping to 6600 level.
1. The PSEi dropped further following BoJ’s decision to maintain key rates and maintain its target on 10-year bond yields during its December meeting.
“Investors may have been a little bit wary over the possibility of the BoJ revising up its 0 percent target on 10-year bond yields, aligning its steps with a global surge in yields,” Business World reported Luis A. Limlingan, managing director at Regina Capital Development Corp., as saying.
BoJ announced on Tuesday after its December policy meeting that it could maintain rates until consumer price inflation exceeds 2 percent.
2. The local index also dropped as other Southeast Asian stock markets also fell. Concerns were also up following the news on the killings in Germany and Turkey.
Limlingan said that there were negative sentiments following the attack against a Russian diplomat, shoppers at a German Christmas market, and the Berlin truck crash.
All sectoral indices closed in the red on Tuesday, except for the property sector. The values of different indices were as follows:
- Services plunged 1.82 percent or 23.37 points to 1,257.79
- Holding firms slumped 1.63 percent or 112.70 points to 6,792.97
- Mining and oil went down 0.57 percent or 69.75 points to 11,968.40
- Industrial fell 0.24 percent or 25.40 points to 10,557.32
- Financials inched down 0.06 percent or 1.02 points to close the session at 1,619.72
- Property went up 0.17 percent or 5.31 points to 2,986.28.
3. Heavy selling by foreign investors continued, which also contributed to the drop of the PSEi.
“Many are concerned that the market is in freefall. I think 6,500 is in sight,” The Philippine Daily Inquirer reported BPI Securities president Michaelangelo Oyson, as saying. Oyson added that volume could thin out as the market was getting close to the bottom this year.
What do you think of the PSEi slumping to 6600 level due to BoJ decision and heavy foreign net selling? Let us know in the comments section below.