PHILIPPINE SHARES fell on Wednesday as concerns over the Taal volcano recent activity and the peso’s weakness caused the market to become cautious.
The Philippine Stock Exchange index (PSEi) dropped by 77.63 points or 1.1% to finish at 6,966.43 on Wednesday. The broader all shares index also declined by 35.31 points or 0.83% to close at 4,213.53.
“Taal poses an uncertainty of whether another eruption could affect surrounding local economies once more,” China Bank Securities Corp. Research Associate Jason T. Escartin said in an e-mail.
“Developments over the Taal volcano and the vaccine delivery will likely drive market movement over the coming days with volatility likely to persist,” he added.
Philippine authorities evacuated dozens of people from areas near Taal volcano, a tourist attraction 65 kilometers south of the capital, after it recorded increased seismic activities, Bloomberg reported.
About 60 residents of Taal island were moved to safer ground, the Philippine Coast Guard said on Twitter. Taal recorded 98 tremor episodes lasting five to 12 minutes in the past 24 hours, the Philippine Institute of Volcanology and Seismology said in a Feb. 16 report.
Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the PSEi’s decline may also be due to the increase in US Treasury yields.
“This comes on the back of the rise in the 10-year US Treasury yield to 1.30%. The sudden depreciation of the Philippine peso also contributed to Wednesday’s foreign fund outflows,” Mr. Tantiangco said in a Viber message.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that higher global oil prices and the weaker peso, which could push inflation higher, also caused some concern among investors.
“Market also partly weighed by recent signals on some delays in the arrival of COVID-19 vaccine supply in the first half of 2021,” he added.
All sectoral indices went down on Wednesday. Financials decreased by 22.96 points or 1.56% to end at 1,443.37; property fell 51.3 points or 1.43% to 3,533.62; holding firms dropped 60.84 points or 0.83% to 7,195.19; services declined by 9.43 points or 0.62% to 1,489.57; industrials went down 48.06 points or 0.52% to 9,051.32; and mining and oil gave up 47.93 points or 0.52% to end at 9,087.20.
Value turnover rose to P19.35 billion on Wednesday with 17.23 billion shares switching hands, higher than Tuesday’s P18.16 billion with 21.86 billion issues traded.
Decliners beat advancers, 145 to 82, while 45 names finished unchanged. Net foreign selling rose to P941.66 million yesterday from the P68.75 million in net outflows logged on Tuesday.
Analysts expect the PSEi to close at around 6,880 to 6,910 for the rest of the week. Investors are looking for signs of recovery, Philstocks Financial’s Mr. Tantiangco said.
“Lack of such is seen to lead to an extension of the market’s decline with a possible testing of the 6,900 support.” — Keren Concepcion G. Valmonte with Bloomberg