Liquidity concerns drag PSEi to 2-month low

MANILA, Philippines - Stock trading remained muted yesterday as liquidity concerns and investor pessimism continued to drag the market, pulling down the main index to a two-month low.

The benchmark Philippine Stock Exchange index (PSEi) sank 1.8 percent or 112.51 points to end at 6,155.34, marking its third straight day in the red. It is the lowest closing for the PSEi since ending at 6,133.24 on Sept. 13.

“Philippine share prices continued to slide past important technical support levels keeping the fear element intense at the trading floor,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp.

“This time however, the PSEi’s movement was in line with those of its peers in the broad region,” Calaycay said, adding that regional movements were dictated by valuations concerns.

Asian stocks were dragged by the overnight decline in Wall St., with Japan’s Nikkei 225 retreating 0.33 percent or 50.48 points to 15,076.08.

The Dow Jones industrial average shed 0.1 percent or 8.99 points to 15,967.03 while the broader Standard & Poor’s 500 index pulled back 0.2 percent or 3.66 points to 1,787.87 on lower-than-expected corporate earnings. But losses were tempered by comments from outgoing Federal Reserve chairman Ben Bernanke that interest rates will remain near zero even after the tapering.

“Oncoming economic data releases, such as retail sales, are in investors’ radar screens, as we search for reliable hints on the schedule of tapering,” Calaycay said.