THE STOCK MARKET fell yesterday as leaders of the US Congress backed a military strike against Syria, a development which investors fear could disrupt the trading of oil.
The Philippine Stock Exchange index (PSEi) lost 115.58 points or 1.90% to 5,968.33, while the broader all-share index fell 58.35 points or 1.57% to 3,663.80.
“Escalating external risks in Syria slid the PSEi below 6,000 as [yesterday] also marked the last day of the Chinese ghost month,” said Abbygayle M. Estrella, analyst at AB Capital Securities, Inc.
Lexter L. Azurin, research head at Unicapital Securities, Inc., added:
“The market dropped today on concerns over possible US military action against Syria.”
The rift between the United States and the Middle East nation could push fuel prices, he explained, a pressing concern for an oil importer such as the Philippines.
“When it comes to oil prices, our country is quite vulnerable since most of our oil consumption is imported and thus will affect the domestic economy, particularly on the consumption side,” Mr. Azurin said.
The stock market climbed earlier this week after US President Barack Obama delayed his decision on a military strike against Syria, seeking Congress’ approval instead.
But the market pulled back after Republican House Speaker John Boehner expressed support for the action. House Majority Leader Eric Cantor also pledged his support for action.
Nancy Pelosi, Democratic minority leader in the House of Representatives, said she believes Congress will support a resolution authorizing the use of US military force against Syria.
The US is leading other nations in a campaign against Syria after Bashar al-Assad’s government allegedly used chemical weapons last month to hit a rebel-held stronghold outside the capital of Damascus.
Major Asian stock markets ended mixed yesterday. Japan’s Nikkei added 75.43 points or 0.54% to 14,053.87; Hong Kong’s Hang Seng index dropped 68.36 points or 0.31% to 22,326.22; while the Shanghai Stock Exchange composite index gained 4.51 points or 0.21% to 2,127.62.
All sectoral indices felt the overall weakness of the local bourse yesterday, with holding firms leading the downtrend, plunging 122.73 points or 2.29% to 5,236.08.
Services dropped 35.60 points or 1.84% to 1,894.26; industrial slid 169.41 points or 1.80% to 9,242.10; property declined 35.36 points or 1.53% to 2,276.82; mining and oil went down 149.91 points or 1.10% to 13,521.98; while financials shed 15.99 points or 1.09% to 1,453.74.
The total value of trades fell to ₱6.01 billion yesterday from ₱5.15 billion on Tuesday.
Losers outnumbered gainers, 105-35, while 48 issues were unchanged.
A daily list of the 20 most actively traded stocks showed 18 issues lost, while two gained.
Leading the losers were SM Investments Corp.; Philippine Long Distance Telephone Co.; Ayala Corp.; Ayala Land, Inc.; and GT Capital Holdings, Inc.
Escalating geopolitical tensions abroad could again weigh on the market today, analysts said.
“We continue to monitor developments abroad especially with regards to the measures the US will take against Syria,” Mr. Azurin said.
“This poses a concern to markets not just locally but major markets as well,” he added.
“If the US decides to attack Syria, then global markets may take a hit…”
Ms. Estrella, for her part, said: “For [today], tensions in Syria still poses a negative bias for the PSEi.”
She pegged the market’s immediate support at 5,770 and the resistance at 6,100. — Cliff Harvey C. Venzon