Share prices plunged deeper into red yesterday, with the main index falling below the 6,500 mark to hit a six-week low, as a ballooning government debt and concerns over China's economic recovery dampened investor sentiment.
The benchmark Philippine Stock Exchange index (PS3Ei) closed at 6,477.36, down by 33.31 points or 0.51 percent, while the broader All Shares index ended at 3,458.30, down by 16.75 points or 0.48 percent.
Total value turnover reached P24.5 billion, bulk of which was related to month-end rebalancing of the MSCI index, which led to a net foreign outflow of more than P4 billion.
Market breadth was negative, 94 to 83, while 49 issues were unchanged.
RCBC chief economist Michael Ricafort said the market's mood soured over reports of the national debt reaching a fresh high of P13.911 trillion in April.
Other stock markets in Asia also staggered toward a second month of losses as weak factory activity figures offered the latest evidence that recovery in the world's second-biggest economy is faltering.
Data showed China's manufacturing activity PMI fell to 48.2 for May, contracting even faster than expected. Services growth slackened to its slowest pace in four months.
'There were concerns China's economic comeback could be so strong that it would complicate advanced economy central banks' fight against inflation,' said Carol Kong, economist and currency strategist at the Commonwealth Bank of Australia.
'Fast forward to today, those expectations look misplaced.'
Elsewhere, inflation and the US debt ceiling are in focus ahead of a vote by Congress on a deal to avert a government debt default.
US President Joe Biden and House Speaker Kevin McCarthy tried to line up votes in support of their deal to allow the government to borrow more. Without agreement, officials warn the government will run out of money as soon as next week, which would roil the economy and financial markets.
'Any upcoming obstacle to a smooth pass-through of the deal could still trigger some de-risking,' said Yeap Jun Rong of IG in a report.
Copyright © 2022 PhilSTAR Daily, Inc Provided by SyndiGate Media Inc. (Syndigate.info).