External risks throw off market for 2nd straight day

MANILA, Philippines —  Investors are growing anxious that economic risks abroad may turn on them soon, forcing them to sell off stocks a day after the Bangko Sentral ng Pilipinas (BSP) made the consensus call to cut rates.

The 30-company benchmark Philippine Stock Exchange index (PSEi) yesterday declined for the second day in a row, losing 0.49 percent or 36.67 points, to close at 7,400.33.

The broader All Shares index also surrendered 0.52 percent, or 21.32 points, to settle at 4,076.24, bothered by risks abroad, particularly in the US.

Specifically, investors were worried by the recent pronouncement from US presidential candidate Donald Trump that he will slap higher tariffs should he win the upcoming polls. He is proposing a blanket tariff of at least 10 percent on all imports, potentially reigniting a trade war.

Regina Capital Development Corp. head of sales Luis Limlingan said uncertainties are increased by the upcoming meeting of the US Federal Reserve in November. To top it off, investors are waiting on their stock picks to report their third quarter performance.

“Sell on news. They focus now on third quarter earnings, Fed meeting (in November) and the US elections,” Limlingan replied, when asked why the PSEi fell in spite of the rate cut.

The BSP on Wednesday delivered a second 25-basis point policy rate cut, bringing it down to six percent as was projected by bankers and analysts.

All throughout trading, the PSEi saw P5.91 billion worth of shares change hands, with decliners outnumbering the gainers, 102 to 92, while 64 issues were unchanged.