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Local stocks extended their slide for the third day in a row on Wednesday after Wall Street crashed following the sudden decision by coronavirus-infected US President Donald Trump to suspend talks on economic stimulus measures.
The benchmark Philippine Stock Exchange (PSEi) index declined 0.72 percent or 42.76 points to close at 5,867.88, while the broader All Shares Index lost 0.45 percent or 15.83 points to close at 3,527.90.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco said the stock market fell further after investors followed Wall Street prompts.
The Dow Jones, S&P 500, and Nasdaq fell 1.34 percent, 1.4 percent, and 1.57 percent, respectively, which Tantiango attributed to Trump’s announcement that fiscal stimulus negotiations have been they would stop until after the US presidential election, raising concerns about the recovery of the US economy from the coronavirus pandemic.
He also cited the pessimistic results of the July 7-14 survey conducted by the World Bank, the National Economic and Development Authority and the Finance Department as also discouraging investor confidence.
Of the 74,031 companies surveyed, 15 percent of them (11,104, according to an estimate by the Manila Times) closed permanently due to the impact of the pandemic on their operations.
Also contributing to the weak performance of the main index was net foreign sales which reached P1.3 billion, according to Tantiangco. The losing streak of net foreign funds is on its 19th day, averaging P711.2 million per day.
He noted that trade showed “conviction” as net worth turnover reached P6.7 billion, well above the year-to-date average of P5.8 billion.
Regina Capital Development Corp. Managing Director Luis Limlingan also cited Trump’s decision to end talks over Wednesday’s decline, which he said sent “nervousness” to investors who expected US lawmakers they will come to an agreement soon.
Local sectors mostly fell, with mining and oil and finance gaining 3.87 percent and 0.37 percent, respectively. Services led the losers with 1.99 percent.
Total turnover volume was 1.81 billion shares, valued at P7.11 billion.
The gains outperformed those that declined, 101 to 92, while 48 values were unchanged.
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