LOCAL shares closed lower on Monday, reflecting Wall Street’s decline amid recession fears and as investors priced in news of a budget overrun at PLDT, Inc.
The benchmark Philippine Stock Exchange (PSEi) index fell 82.23 points, or 1.26%, to close at 6,414.27 on Monday, while the broader all-shares index fell 32.82 points, or 0.96%, to 3,367 .31 lost.
“The local market declined this Monday…due to negative spillovers from Wall Street fueled by US recession fears,” said Mikhail Philippe Plopenio, research and engagement officer at Philstocks Financial, Inc., in a Viber News.
Wall Street dismissed a third straight meeting on Friday amid fears the central bank’s campaign to fight inflation would plunge the economy into recession, Reuters reported.
The Dow Jones Industrial Average fell 281.76 points, or 0.85%, to 32,920.46; the S&P 500 fell 43.39 points, or 1.11%, to 3,852.36; and the Nasdaq Composite fell 105.11 points, or 0.97%, to 10,705.41.
Last week, the US Federal Reserve raised its benchmark federal funds rate by 50 basis points (bps) to the 4.25%-4.5% range and forecast it could rise to 5%-5.25% next year.
The Fed has now raised borrowing costs by 425 basis points since March.
“Apart from recession fears next year, investors were surprised by the recent news from PLDT where there was a budget overrun of P48 billion. The stock is now down 19.35% and could fall further,” Jeff Radley C. See, head trader at Mercantile Securities Corp., said in a Viber message.
In a disclosure on Friday, PLDT said it had found an estimated budget overrun of no more than Pta48 billion, equivalent to 12.7% of total capital spending over four years.
According to the company, the budget overrun is being run through internal forensics and discussions with key vendors. It added that the investigation did not uncover any “fraudulent transactions, sourcing anomalies or asset losses.”
On Monday, shares of PLDT closed down 286 points, or 19.35%, to 1,192 each. The company’s shares were sold at an intraday low of 1,187 shares, which is also the new 52-week low.
Most sector indices closed lower on Monday, with the exception of real estate, which rose 32.7 points or 1.17% to end Monday’s session at 2,823.60.
Meanwhile, services fell 99.14 points, or 5.98%, to close at 1,557.89; Financials declined 116.03 points, or 0.97%, to 1,628.44; Industrials fell 85.21 points, or 0.91%, to 9,187.34; Holding companies declined 30.13 points, or 0.47%, to 6,316.78; and Mining & Oil declined 5.34 points or 0.05 to close at 10,160.49.
Value turnover rose to 18.72 billion pesos on Monday, with 1.31 billion shares changing hands out of 7.31 billion pesos and 558.77 million issues traded on Friday. Losers overwhelmed movers, 123 to 55, while 45 names closed unchanged.
Overseas net sales rose to 1.01 billion pesos on Monday from 148.81 million pesos in the previous trading day.
Mercantile Securities’ Mr. See placed PSEi’s support at the 6150, 6250 and 6400 levels and resistance at the 6660 and 6800 levels. — Justine Irish D. Tabile