MANILA, Philippines — Local equities sank deeper into the bear market territory on Wednesday amid investor fears over rising interest rates and their crippling effect on the global economy.
The Philippine Stock Exchange index shed 2.33% to close at 5,879.68. The broader All Shares index dropped 2.12%, with all sub-indices simmering in the red led by mining and oil shares.
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Analysts said the local bourse on Tuesday entered the bear market territory, which happens when stocks fall 20% or below from recent highs.
Luis Limlingan, head of sales at local brokerage Regina Capital, said the malaise brought by higher interest rates and recession concerns was felt all over global markets.
“Philippine shares continued falling on climbing rates and global recession fears, with other regional indices falling deeper into the bear market,” he said in a Viber message.
Limlingan noted that the local bourse is already trading near or at oversold territory. But when the market will return to bargain hunting is hard to predict, considering the trend globally.
Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp., believes the slump is not yet over for PSEi.
“At these levels, I think there is still room for downside, but clearly it is sentiment that is driving market movements. The pace of interest rate increases continues to be uncertain which creates a lot of volatility,” he said in a Viber message.
Regional equities trended downward as well. Hong Kong closed down more than 3%, while Seoul and Taipei sank more than 2%. Tokyo, Shanghai, Singapore were off more than 1%. There were also losses in Sydney, Wellington and Mumbai.
For Hernan Segovia, trader at Summit Securities, a cause for concern remains if the local bourse hits the 5,400-level.
“New worry of concern is if 5,400 level breaks as this will open an invitation for a gap fill at 4800s levels. The rally gap after we did a horrendous March 19, 2020 huge drop,” he said.
Foreign investors sold P588.9 million more shares than they bought in the local stock market. A total of million 815.83 million stocks, valued at P6.79 billion, switched hands on Wednesday. — with AFP