PSEi continues to decline as net overseas sales surge

SHARES fell further on Tuesday as net foreign sales surged amid Wall Street’s surge and expectations of global monetary tightening.

The Philippine Stock Exchange (PSEi) benchmark index fell 110.40 points, or 1.65%, to close at 6,577.45 on Tuesday, while the broader all-shares index fell 40.81 points, or 1.13%, to 3,550 .40 declined.

“Philippine stocks continued to slide as investors returned to the US after being crushed last week. Wall Street is also looking ahead to new home sales…US stocks rallied Monday as investors bought struggling stocks like banks after the Dow Jones Industrial Average declined for eight straight weeks,” said Luis A., Head of Sales of Regina Capital Development Corp., Limlingan said in a Viber message.

Overseas net sales rose to P9.58 billion on Tuesday from P305.97 million in the previous trading day.

US stocks closed higher on Monday as bank gains and a rebound in market-leading tech stocks supported a broad-based rally that followed Wall Street’s longest streak of weekly declines since the dot-com bust more than 20 years ago.

The Dow Jones Industrial Average rose 618.34 points, or 1.98%, to 31,880.24; the S&P 500 rose 72.39 points, or 1.86%, to 3,973.75; and the Nasdaq Composite rose 180.66 points, or 1.59%, to 11,535.27.

On Friday, the S&P 500 closed 18.7% below its Jan. 3 record high. If the benchmark index closes 20% or more below this record, it will confirm that it has been in a bear market ever since.

Markets have been agitated in recent weeks by concerns over persistently high inflation and aggressive attempts by the US Federal Reserve to contain it as the global economy grapples with the aftermath of Russia’s invasion of Ukraine.

First Metro Investment Corp.’s head of research Cristina S. Ulang said the market has fallen again, mainly due to increasingly hawkish messages from the world’s largest central banks, including the European Central Bank (ECB).

The euro bounced higher on Tuesday after the ECB said it would likely lift its deposit rate out of negative territory by September.

The majority of industry indices ended lower, with the exception of mining and oil, which rose 21.71 points, or 0.18%, to 11,780.86.

Meanwhile, holding companies declined 145.31 points, or 2.35%, to 6,018.51; Financials fell 27.79 points, or 1.74%, to 1,566.21; real estate fell 38.99 points or 1.27% to close at 3017.08; Industrials declined 109.72 points, or 1.17%, to 9,248.14; and services declined 9.12 points, or 0.48%, to 1,873.27.

Relegated defeated promoted, 120 versus 63, while 54 names ended unchanged.

Value turnover rose to 20.20 billion pesos on Tuesday, with 1.54 billion shares changing hands from 6.64 billion pesos, with 1.22 million issues recorded on Monday. — Luisa Maria Jacinta C. Jocson With Reuters