What’s left of foreign investors in the stock market, left yesterday according to traders taking with them another P1 billion. The peso skidded to a low of 41.38 to the US dollar after hitting the 41 level last Monday.

Traders said 41 is the level being watched by the central bank as the cue speculators may take against the peso. The peso traded from 41.15 to 41.38 before closing at 41.20 to the US dollar.

The Philippine Stock Exchange index (PSEi) ended flat at 2,909.00, after bottom fishers helped stave off further declines.

Traders said the Government Service Insurance System (GSIS) and the Social Security System were in the market. Losers edged gainers 54 to 34 with 44 stocks unchanged.

Trading turnover reached 840.08 million shares for P3.4 billion.

"We have to face the fact that life in the stock market will not be present in the next few months," said Irving I. Ackerman, president of brokerage firm I. Ackerman & Co., Inc.

He said foreign selling never abated, "the foreigners are gone’.

Citiseconline.com meanwhile said "the chance of the market holding its present support seems quite grim." Citiseconline said investors should "prepare then for the continuation of the corrective sweep."

At the least there should have been a 40 - 50 points follow through decline by the market after yesterday’s drop. But GSIS and SSS prevented that.

"When there are fears about a protracted political controversy, and the danger of a recession in the US, any investor in his right mind won’t risk the market," the trader added.

The trader noted that blue chips shares, like Ayala Corp. and related stocks, are continuously dumped by foreigners which suggest that they intend to leave the market for long time. "The foreigners have left us," the trader said.

Philippine Long Distance Telephone Co. was up P65 to P2,795.

Manila Electric Co. was up P1 to P78.50.

Ayala Corp. shed P5 to P397.50.

Unit Ayala Land Inc. was steady at P10.25.

SM Prime Holdings Inc. was steady at P7.90.

The foreigners’ exodus largely resulted from new wave of credit fears that swamped Wall Street, pushing stocks to 17-month lows and bond prices sharply higher, as skittish investors reacted to rumors and news of firms exposed to the mortgage crisis.

US Treasury debt prices jumped and interest rate swap spreads gapped wider on the speculation, just one more sign of how markets have tightened amid a growing list of troubles that have jolted financial sector.

Oil shot to a record over $108 a barrel as investors bought crude contracts as a hedge against a depressed dollar, which tumbled against the yen amid fears of a US recession.

Recession fears mounted on Friday’s report of the biggest US job losses in five years and strains in the credit market have sunk the dollar and raised expectations the Federal Reserve could soon cut interest rates again to prop up the economy.