By Leslie Venzon
MANILA, (PNA) –- Philippine share prices joined other Asian bourses lower on Monday, as investors awaited a United States budget deal.
The benchmark Philippine stock exchange index (PSEi) ended its two-day rally, losing 47.10 points or 0.73 percent to 6,442.70 from Friday’s 6,489.80.
Jun Calaycay, an analyst at Accord Capital Equities Corp., said the critical date for investors is October 17 which is the deadline to increase the US debt limit.
He said a failure to reach a compromise on extending the current debt ceiling can influence investors’ sentiment and their trading and investing decisions. The US will then go into default of its obligations.
Calaycay explained that a default may invite yet another downgrade of US government papers, making it more difficult and costly for it to borrow even as it increasingly needs to.
”This will hurt the government’s existing and planned efforts to spur economic growth, even possibly reversing the strides already made, particularly in the all-important jobs and housing markets. This will also result in a weaker currency relative to its peers – including the Philippine peso,” he said.
In Monday’s trading, the market’s slump was led mainly by services that declined 1.04 percent.
Other counters fell moderately, except mining and oil that rose 0.13 percent.
Volume of transactions reached 1.16 billion shares valued at P4.02 billion.
Decliners dominated gainers, 97 to 51, while 42 issues were unchanged.
The day’s biggest losers were led by Mabuhay Vinyl Corp., Vivant Corp., United Paragon Mining Corp., Manila Mining Corp. and Starmalls Inc.