The stock market sank Wednesday as global oil prices continued to tumble on the back of warnings of slowing demand and rising stockpiles.
The Philippine Stock Exchange Index tumbled 106.20 points, or 1.3 percent, to 8,273.44 on a value turnover of P5.9 billion. Losers beat gainers, 109 to 76, with 53 issues unchanged.
SM Prime Holdings Inc. of retail tycoon Henry Sy Sr. fell 1.4 percent to P35.50, while Megaworld Corp., the biggest lessor of office spaces, dropped 3.1 percent to P5.32.
DMCI Holdings Inc., which is into power generation, coal mining, water distribution, construction and property development, slumped4.5 percent to P14.42, while JG Summit Holdings Inc. of industrialist John Gokongwei sank 4 percent to P73.45.
Asian energy firms, meanwhile, extended a global sell-off Wednesday, dragging regional equity markets.
Both main oil contracts were down more than one percent as investors were spooked after the International Energy Agency cut its forecast for crude consumption, saying recovering prices and a mild early winter were weighing on purchases.
The Paris-based group said the sector would likely be oversupplied in the last three months of the year and 2018, while the US industry body announced a huge jump in stockpiles last week.
The news comes after recent gains in crude fueled by a production cut by the Opec cartel and a brewing crisis in the Middle East between Saudi Arabia and Iran.
“The long-awaited short-term correction in oil prices finally occurred overnight,” said OANDA senior market analyst Jeffrey Halley.
“Given the bullish run and extended long positioning across commodities in general in recent times, it was only going to (take) one straw to break the camel’s back.”
The losses in oil prices—which follow Tuesday’s 1.9 percent fall in WTI and 1.5 percent drop in Brent—battered Asian energy firms.
The sell-off filtered through to wider stock markets, which have been on a broad decline since hitting multi-year highs last week.
Tokyo plunged 1.6 percent, with a stronger yen and a slight slowdown in Japanese economic growth adding to the waning optimism. The Nikkei had ended at a quarter-century high last Thursday.
Hong Kong lost one percent, Shanghai shed 0.8 percent, Sydney was 0.6 percent off and Singapore gave up 0.8 percent. Seoul eased 0.3 percent, and Taipei was 0.5 percent lower.
Among the biggest losers Tokyo-listed Inpex dived 3.7 percent and Japan Petroleum Exploration tumbled 4.2 percent, while PetroChina and CNOOC in Hong Kong each plunged around three percent. Woodside Petroleum sank 1.4 percent in Sydney, while Rio Tinto was 2.7 percent lower. With AFP
The retreat followed fresh losses on Wall Street, where all three main indexes have succumbed to profit-taking after last week hitting record highs.
US dealers are also concerned about Donald Trump’s tax cuts as Republican lawmakers struggle to agree on a unified plan, which has led to speculation the legislation could fail in a similar way to the healthcare overhaul. With AFP