Philippines share prices closed 0.76 percent lower on Wednesday after Wall Street's tumble on rising US bond yields which sparked concerns the Federal Reserve could raise interest rates, dealers said. The composite index shed 27.28 points to 3,543.82, after moving between 3,526.00 and 3,549.40.
The broader all-share index fell 10.05 points to 2,261.13 Losers outnumbered gainers 76 to 37, while 56 stocks ended flat. A total of 6.6 billion shares worth 4.7 billion pesos (100.99 million dollars) changed hands. "Investors fretted over the upward trend in US bond yields so they went on a cautious mode and started selling whatever gains they made in recent sessions," said Ron Rodrigo of Unicapital Securities.
US stocks plunged overnight after the yield on 10-year Treasuries jumped to a five-year high of 5.295 percent. "Most of the major drivers of the rise in equity markets have always been foreign money. So since US bond yields are now attractive again and are less risky, fund managers may move back their money into the bond market," said James Lago of Westlink Global Equities.
Lago believes the recent rally in local stock prices to record levels was "unwarranted." "We are moving too much ahead of fundamentals. The market is looking for an excuse for a healthy correction." Interest rate-sensitive property stocks retreated, led by Ayala Land which gave up 50 centavos to 16.50 pesos. Megaworld edged down 10 centavos to four pesos. SM Prime Holdings fell 50 centavos to 12.75 pesos.
Philippine Long Distance Telephone, or PLDT, shed 10 pesos to 2,650. Globe Telecom gained five pesos to 1,420. San Miguel A closed unchanged at 66 pesos, and its B shares were steady at 72 pesos.
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