Stocks fell for a second day, amid another sell-off in energy firms in Asian markets that tracked hefty losses on Wall Street as oil prices tanked.
The Philippine Stock Exchange index, the 30-company benchmark, shed 31 points, or 0.4 percent, to close at 7,886.37, as four of the six major sectors declined. Despite the loss, the bellwether was still up 15.3 percent since the start of the year.
The heavier index, representing all shares, also dropped 10 points, or 0.2 percent, to settle at 4,708.79, on a value turnover of P8.1 billion. Losers outnumbered gainers, 107 to 94, while 41 issues were unchanged.
Eight of the 20 most active stocks ended in the green, led by developer Cebu Landmasters Inc. which climbed 5.6 percent to P5.90 and gaming firm Bloomberry Resorts Corp. which advanced 3.3 percent to P9.70. Wilcon Depot Inc. sustained its gain, with a 2.8-percent rise to close at P7.79.
Meanwhile, Shanghai was the shining light in Asia, ending up 0.5 percent after MSCI’s decision to include mainland-listed firms in a key index.
Crude prices sank more than two percent on Tuesday on increasing fears of a global supply glut, as continued production in the US and elsewhere offsets an OPEC output cut deal.
The fall also came despite a drop in US inventories.
“Oil prices have officially entered a bear market [and] plummeted two percent after reports of rising output from Nigeria and Libya—both Opec members exempt from the production cut deal,” said Stephen Innes, senior trader at Oanda.
The crude sell-off, which means the commodity has lost a fifth of its value from recent highs, saw energy firms drag Wall Street down, with all three main indexes ending deep in the red.
And while both main contracts stabilized on Wednesday, Asian energy firms followed their US counterparts.
Rio Tinto sank 2.9 percent and BHP dived close to four percent in Sydney, while Hong Kong-listed CNOOC was 0.7 percent off and Inpex fell 1.2 percent in Tokyo.
Broader markets were also well down. Tokyo’s Nikkei fell 0.5 percent, Hong Kong gave up 0.5 percent in the afternoon, Sydney sank 1.6 percent to its lowest close since early February and Seoul dipped 0.5 percent.
Singapore tumbled 0.7 percent, Wellington eased 0.8 percent and Manila fell 0.6 percent.
But Shanghai bucked the trend to end up 0.5 percent after the US-based MSCI finally approved mainland-listed stocks, or A-shares, for inclusion in its emerging markets index.
The agreement, after three previous rejections, means that for the first time foreigners will be able to buy into Chinese markets directly, providing a possible $8 billion of inflows in the near term.
It is also seen as another step in further opening up to the world economy and asserting Beijing’s growing importance to global finance.
However, analysts tempered expectations and pointed out that while the decision is important, Chinese stocks will only account for 0.7 percent of the index when they are included next June.
Northeast Securities analyst Shen Zhengyang said: “The thing itself is a good thing. But it has limited benefit for the market. The money that will come in is just a drop in the bucket, while the market’s liquidity itself isn’t sufficient at the moment due to the deleveraging process in the financial system.”
The yuan edged up on the MSCI move but the pound extended Tuesday’s losses after Bank of England governor Mark Carney dismissed an interest rate rise any time soon. With AFP, Bloomberg