Stocks tumbled Wednesday, dragging the benchmark index below 8,000 points, amid global retreat on worries over weak US data and plunging oil prices.
The Philippine Stock Exchange index, the 30-company benchmark, slid 149 points, or 1.9 percent, to close at 7,888.44 on Wednesday. The bellwether was still up 13.5 percent since the start of the year.
The heavier index, representing all shares, also dropped 70 points, or 1.5 percent, to settle at 4,691.13, on a value turnover of P13.6 billion. Losers outnumbered gainers, 163 to 37, while 41 issues were unchanged.
Only two of the 20 most active stocks ended in the green. Security Bank Corp. rose 0.2 percent to P224.40, while conglomerate Ayala Corp. gained 0.1 percent to P880.
Aboitiz Equity Ventures Inc. fell 6.3 percent to P74.80, while PLDT Inc. dropped 4.8 percent to P1,867. DoubleDragon Properties Corp. retreated 3.6 percent to P53.90.
Meanwhile, most Asian markets tumbled for Wednesday, extending a global retreat, with Tokyo taking a hit from a strong yen after Japan’s economy-boosting stimulus programme fell flat with investors.
Stocks rallied last month on promises of support from central banks. But disappointments about stimulus, weak US data, plunging oil prices and worries about European banks have sent dealers scurrying for cover.
Japan’s government on Tuesday unveiled details of a 28-trillion yen package that it hopes will kickstart growth in the world’s number three economy.
But the plan fell short of market expectations as only a quarter of it is new spending. The yen, seen as a safe haven asset in times of uncertainty, surged as a result.
The disappointing package—unveiled days after another sub-par stimulus from the Bank of Japan — saw the dollar tumble to a three-week low of 100.86 yen.
While it had edged up to 101.03 yen in Asian trade Wednesday, the stronger Japanese currency dragged on the country’s exporters and the Nikkei closed down 1.9 percent.
“After all the build-up, it’s a disappointment,” Shane Oliver, a global investment strategist at AMP Capital Investors in Sydney, told Bloomberg News.
Hong Kong ended down 1.8 percent, with traders also playing catch-up with regional losses Tuesday when the city’s exchange was closed because of a typhoon. However, banking giant HSBC ended 1.8 percent higher after it announced a $2.5 billion stock buyback and said it would maintain its dividend.
The decision came as it reported a 40 percent drop in net profit during a tumultuous April-June quarter leading up to the British EU referendum on June 23.
Sydney ended down 1.4 percent, Seoul was 1.2 percent off and Singapore shed one percent, with Manila more than two percent lower. Wellington and Taipei also tumbled.
However, Shanghai bucked the regional trend to close 0.2 percent higher
US and European markets ended down Tuesday, with anxiety growing that stress tests on Europe’s banks were overly lenient, said Chris Low, chief economist at FTN Financial. With AFP, Bloomberg
The overriding fear concerns the difficulty banks face in making money during a low interest rate era.
Oil fell again, with investors on edge after the commodity sank into a bear market — a 20 percent fall from recent highs—on renewed worries about a supply glut as the crucial US summer driving season nears its end.
Brent edged down 0.3 percent to $41.66 and West Texas Intermediate eased 0.2 percent to $39.44.
Both contracts are well down from the levels above $50 touched in early June when output was hit by disruptions in Nigeria and Canada.
With AFP, Bloomberg.
