By Madelaine B. Miraflor

The local stock market recorded its steepest fall for the year yesterday after being dragged down by the Wall Street sell-off on Friday and extended to Asian bourses Monday.

Philippine Stock Exchange index (PSEi) shrank on Monday, losing 194.75 points, or 2.21 percent to close at 8,616.00, while the wider all shares declined by 111.40 points, or 2.15 percent to 5,070.42.

PSEi’s heavyweights SM Investment and SM Prime Holdings also sank 2.43 percent and 4.60 percent, respectively, eventually dragging the Philippine index down to its lowest in five weeks.

Giving up strong gains it had in January, local stocks fell by as much as 2.9 percent in the middle of yesterday’s session, marking their biggest intraday percentage drop since November 2016.

This, after Asian shares fell the most in over a year as fears of resurgent inflation knocked down bonds and upset Wall Street on Friday, with three major US indexes recording their biggest weekly losses in two years, a Reuters report showed.

Marita Limlingan, president of Regina Capital Development Corp., noted that US equities suffered their largest one day decline in a year on Friday, contributing to the worst week for the S&P500 in around two years.

“The dramatic slide last week followed very strong performance in the preceding two weeks, and in part was due to profit taking after a very strong start to the year and into earnings,” Limlingan said. European stocks, on the other hand, dropped for a fifth straight session on Friday, with the German market leading the charge south.

“There is a cautious mood currently because of the sudden surge in yields, so I think markets are trying to adapt to this changing environment of changing yields and expectations of higher inflation going forward,” Joel Ng, a research analyst at KGI Securities in Singapore, said in the Reuters report.

Going back to PSEi, all the sectors likewise ended up on the red side.

“Here at home, we were not spare by the onslaught of selling as the healthy employment data implied the rate hikes expected this year may reach four. Federal Reserve’s Williams sees three to four hikes,” Limlingan further said.

Of all the sectors, property had the steepest fall, losing 125.21 points, or 3.14 percent to 3,868.68, followed by industrial, which shed 319.59 points, or 2.69 percent to 11,572.00.

Next to them were mining and oil, which declined by 316.96 points, or 2.62 percent to 11,766.09, and holding firms, which erased 220.49 points, or 2.45 percent to 8,787.27.

Services, on the other hand, fell by 20.84 points, or 1.21 percent to 1,697.27, while financials went down by 19.47 points, or 0.88 percent to 2,204.08.

Total value turnover stood at P8.50 billion, while losers outnumbered gainers, 170 to 33. 38 issues were unchanged.