The battered local stock market continued to drop, this time after US Treasury yields hit a 16-year high. 

The main index fell by 77.88 points or 1.24 percent to close at 6,212.39 as Conglomerates led the retreat while Banks managed to advance. Volume amounted to 391 million shares worth P4.79 billion as there were twice as many losers to gainers at 122 to 60 while 40 were unchanged.

“Philippine shares fell as the yield on the 10-year Treasury reached its highest level since November 2007, gaining about 9 basis points to trade at 4.34 percent,” said Regina Capital Development Corporation Managing Director Luis Limlingan. 

Philstocks Financial Assistant Research Manager Claire Alviar said, “the local bourse dropped as concerns remained especially with the inflationary risks that could eventually impact the country’s economic growth, which already disappointed investors in the second quarter.”

“In addition, India slapping an export tax on onions may add inflationary pressures as this move is expected to increase global onion prices,” she noted. 

China Bank Capital Corporation Managing Director Juan Paolo Colet said, “the market continued its downtrend after slicing through major support lines last week amidst heavy foreign selling. Although most Asian markets were in positive territory, sentiment in our market remained weak as rising US treasury yields and an underwhelming China interest rate cut have prompted investors to reassess their risk exposure to equities.”

He added that, “the index is precariously close to its 6,200 support, and while we see a chance of a brief technical rebound, many investors will remain cautious ahead of the US Federal Reserve’s annual economic policy symposium later this week.”