Stocks weaken further, lowest in nearly 3 months

MANILA, Philippines — Local share prices slid over three percent yesterday, leading broad losses in Asia’s emerging stock markets after US stock futures tumbled, leaving already unnerved investors unsure about taking on riskier bets.    

The benchmark Philippine Stock Exchange index (PSEi) finished at 6,612.62, down 239.22 points or 3.49 percent, while the broader All Shares index slipped 101.01 points or 2.45 percent to close at 4,007.33.

It was the fourth straight session of losses for the PSEi and its lowest level since Nov. 4 last year.   

It has been a frenzied week in global equity markets, with retail investors taking on hedge fund short positions.     That has spilled over to Asia just as COVID-19 vaccine rollouts run into delays and the global economic recovery looks more uncertain.

“Investors should be looking through wild swings in several speculative US stocks and stay focused on fundamentals,” said Wei Liang Chang, a macro strategist at DBS Bank in Singapore.     He added that “some precautionary deleveraging is still likely warranted” due to higher volatility.   

Broadly, Asia’s amateur investors, emboldened by the meteoric rise of US videogame retailer GameStop, are taking on short sellers and making brokers worried enough to cut off margin lending.    

“I think its best to be very cautious into the weekend as retail gains could trigger more hedge fund pain,” Stephen Innes, the chief global markets strategist at Axi, said in a note.      

DA Market Securities said foreign selling weighed on the market yesterday as foreign fund managers continued to dump Philippine equities.