Investor pessimism drags index to 3-month low

MANILA, Philippines - Widespread pessimism in the local bourse dragged the main index to its three-month low yesterday, nearly erasing year-to-date gains.

The Philippine Stock Exchange index (PSEi) sank 2.04 percent or 122.54 points to close at 5,886.40, its lowest since ending at 5,738.06 on Aug. 28. It is the sixth consecutive day the bellwether index ended in the red.

The broader All Shares index retreated 1.85 percent or 68.22 points to 3,612.58.

“We broke down the support level of 6,000 and then [the selling] continued,” Freya B. Natividad, investment analyst at Papa Securities Corp., said in a phone interview.

Natividad said the market has been on a downtrend since Super Typhoon Yolanda hit the Philippines hard.

“At this point, nothing appears able to spur confidence in equities with the index’ sustained decline further foddering pessimism, even as liquidity seems to begin to dry up,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp.

Calaycay said opening trades showed a glimmer of hope but optimism wilted, pushing the main index to close at its intraday low. PSEi ended 2012 at 5,812.73.

Even the advance in Wall St. failed to lend confidence in the local market. The Dow Jones Industrial average inched up 0.03 percent or 5.33 points to 16,025.53, while the broader Standard & Poor’s 500 index rose 0.18 percent or 3.28 points to 1,808.37 amid indications the US Federal Reserve’s tapering program will be gradual.