Shares drop on profit taking as conflict worsens

STOCKS slid on Wednesday on profit taking and as Russia continued to attack Ukraine, affecting prices of oil and commodities.

The benchmark Philippine Stock Exchange index (PSEi) fell by 100.59 points or 1.35% to close at 7,304.02 on Wednesday, while the broader all shares dropped by 40.31 points or 1.02% to close at 3,880.74.

“Local and global equities fell in what has become a volatile week as the Russia-Ukraine crisis deepened and stirred anxiety among investors,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local stock market declined near its support level on the back of intensifying Russia-Ukraine tensions, with global oil prices topping $ 100 per barrel, especially the Dubai Crude. This raises worries about our local inflation rate, ”Philstocks Financial Research Associate Claire T. Alviar said in a Viber message.

“Negative sentiment from overseas markets also spilled over in the local stock market. In addition, traders also took profit after the two-day rally of the market, ”Ms. Alviar added.

Russia is aiming to erase Ukraine, its history and people, President Volodymyr Zelenskiy said in a video on Wednesday as the seventh day of Moscow’s invasion of its neighbor started with heavy shelling of the Black Sea port of Mariupol, Reuters reported.

Moscow switched to strikes on Ukrainian cities on Tuesday and appeared poised for an advance on Kyiv as the West tightened an economic noose around Russia in retaliation.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.56% with China’s blue-chip CSI300 index 1.12% lower.

Japan’s Nikkei fell 1.68%.

US West Texas Intermediate crude jumped nearly 6% to $ 109.30, its highest since September 2013.

The effect of the war on commodity prices is causing inflation concerns due to supply worries, Mr. Limlangan said.

“Investors await Fed Chair Jerome Powell’s semiannual hearing at House Committee on Financial Services to get some clues on potential rate hikes,” Mr. Limlangan added.

A shifting global growth outlook has seen investors trim bets that the Federal Reserve will aggressively hike interest rates in coming months.

Majority of sectoral indices ended in the red except for mining and oil, which increased by 178.98 points or 1.43% to 12,661.68.

Meanwhile, property went down by 79.38 points or 2.24% to 3,458.28; industrials declined by 171.67 points or 1.67% to 10,092.95; financials lost by 17.26 points or 1.01% to 1,688.20; services dropped 16.94 points or 0.87% to 1,923.20, and holding firms fell by 55.61 points or 0.78% to 7,072.30.

Value turnover increased to P7.78 million with 1.43 billion shares changing hands on Wednesday from P7.84 billion with 1.01 billion issues seen the previous trading day.

Decliners outnumbered advancers, 128 versus 65, while 44 names closed unchanged.

Net foreign selling climbed to P295.42 million yesterday from P83.13 million on Tuesday. – LMJC Jocson with Reuters

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