By the closing bell on Thursday, the PSEi had lost 2.34 percent, or 157.24 points, to 6,557.09, while net foreign selling exceeded P2 billion.
This slashed year-to-date gains from nearly 18 percent to about 1.2 percent.
The benchmark index plunged over 1,000 points since its Oct. 7 intraday high of 7,604.61, said Juan Paolo Colet, managing director at China Bank Capital.
Losses accelerated after President Trump reclaimed the White House in the recent elections on November 5. Since then, the Philippine Stock Exchange Index (PSEi) has plunged nearly 10 percent, or about 700 points.
“A lot of that is driven by a strong undercurrent of worry about our economy’s prospects in the face of Trump 2.0,” Colet said on Thursday.
Oversold market
“At this point, the market is technically oversold and investor reaction seems overdone,” Colet said.
“While there is still downside risk given fragile sentiment, I don’t think the future is as bleak as what the market is pricing in, and I would advise investors to prepare for bargain hunting,” he added.
Recent bull market is over
Juanis Barredo, chief technical analyst at COL Financial Group, acknowledged that the recent decline marks the conclusion of the brief bull market, according to chart-based technical indicators.
This might have held if the PSEi defended 6,800, but selling pressure overwhelmed the bulls.
“It has gone beyond expectations and now eyes 6,460-6,315 as next support zones,” Barredo said.
Long-term uptrend still intact
He noted that while the recent bull run is over, a much longer-term upward trend remains intact. However, this too would be invalidated if the PSEi falls below the 6,200 level.
“I do hope though that local central banks may soon move in to curb any extended weakness in their currencies,” Barredo said.
“And I do hope that leads to some rebound action into currencies and markets. It may be temporary for the meantime but enough to drive some consolidation time and allow the Trump trade pieces to fall and settle,” he added.
A closer look
Large-cap losers on Thursday were led by Ayala Land Inc., which dropped 4.8 percent to P28.80 each on a value turnover of over P1 billion.
It was followed by BDO Unibank Inc., down 2.75 percent to P138.10; International Container Terminal Services Inc., up 0.53 percent to P380; SM Investments Corp., down 2.67 percent to P876; and Universal Robina Corp., down 6.91 percent to P79.50 per share.
Mining and oil slumped 3.42 percent, followed by property (-3.42 percent) and holding firms (-2.8 percent).
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
