STOCKS slumped further on Tuesday on continued profit taking amid growing concerns over a global recession as central banks continue to tighten monetary policy amid inflation risks.
The Philippine Stock Exchange index (PSEi) declined by 86.03 points or 1.28% to close at 6,618.38 on Tuesday, while the broader all shares index went down by 46.02 points or 1.28% to 3,531.91.
“Local shares were sold down once again as the summer rally faded amid mounting rate hike concerns,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Profit takers continued to emerge, sending the PSEi to retreat to the 6,600 level after staying in the overbought region for last week,” Mr. Limlingan added.
AB Capital Securities, Inc. Vice-President and Head of Research Jovis L. Vistan likewise said that Philippine stocks went down due to profit taking, as well as renewed fears of a global recession.
“High energy prices in Europe are seen to weaken the western economies and this sent the euro to 20-year lows,” Mr. Vistan said in a Viber message
Oil prices rose on Tuesday after Saudi Arabia warned that the Organization of the Petroleum Exporting Countries, a major oil producer, could cut output to correct a recent oil price decline, Reuters reported.
Brent crude gained 42 cents or 0.4% to $96.90 a barrel while US West Texas Intermediate crude futures rose 40 cents or 0.4% to $90.76 a barrel.
Weakening economies in Germany and France piled more pressure on markets on Tuesday as decades-high inflation and surging gas prices drag Europe towards recession.
Back home, all sectoral indices closed lower on Tuesday. Mining and oil went down by 351.13 points or 2.89% to 11,781.67; property dropped by 54.92 points or 1.83% to 2,935.84; holding firms declined by 105.14 points or 1.63% to 6,331.84; services lost 20.76 points or 1.18% to end at 1,725.42; industrials gave up 109.29 points or 1.09% to close at 9,865.55; and financials decreased by 1.23 points or 0.07% to 1,579.85.
Value turnover increased to P5.67 billion on Tuesday with 972.68 million shares changing hands from the P5.44 billion with 816.98 million issues seen on Monday.
Decliners overwhelmed advancers, 151 versus 37, while 40 names were unchanged.
Net foreign selling went down to P100.83 million from the P342.42 million seen the previous trading day.
Regina Capital’s Mr. Limlingan said that investors are waiting for data on US July new home sales, August manufacturing purchasing managers’ index and the August Richmond Federal Reserve survey, all set to be released overnight.
He placed the PSEi’s support at 6,600 and resistance at 6,850, while AB Capital Securities’ Mr. Vistan put support at the PSEi’s 20-day moving average of 6,560 and resistance at 6,770. — Justine Irish D. Tabile with Reuters