STOCKS continued their downward movement for the second day in a row due to profit taking amid a good forecast for Asian equities next year and ahead of the release of the minutes of the last Federal Open Market Committee (FOMC) meeting, as well as the US Thanksgiving holiday.
The all-shares index, meanwhile, closed at 4,846.38, down 5.30 points or 0.10%.
“The index closed in the negative territory today as investors took profits in SM [Investments Corp.] and BDO [Unibank, Inc.] after the banking stock reached its all-time high of P149.50. I also think that the last-minute dumping today is just another ordinary day of profit taking for investors after a good announcement from Goldman Sachs said that Asian equities excluding Japan may see favorable returns in 2018,” Jervin S. de Celis, equities trader at Timson Securities, Inc., said in a text message on Wednesday.
US banking giant Goldman Sachs Group, Inc. released yesterday a report forecasting strong performance of stocks in Asia except Japan, after a 33% rally in 2017. Goldman Sachs increased its 12-month target for the MSCI Asia Pacific index ex-Japan by 9.7% to 620, favoring China, India, and South Korea stocks.
“Equities were sold down ahead of both the FOMC minutes and the Thanksgiving holiday. Bets were also placed, which arose as investors speculating on whether the US tax cut would keep the current economic expansion going,” Luis A. Limlingan, managing director at Regina Capital Development Corp. said in a text message.
Concerns over the proposed tax reform plan of the Republican Party still linger in Wall Street, with the uncertainty of the passage of the plan in the legislative bodies in the US.
Meanwhile, the FOMC minutes were scheduled for release last night.
“Looking into the indicators, we can see hints of continued decline although as of now the 50-day moving average is slightly breached. If this trend continues this week, we get to see another strong support level at 8,100. We also have to note that ATR (average true range) is still recording high volatility levels so caution is advised,” Mr. Limlingan added.
Among the sectoral indices, only industrials and property gained, with industrials closing at 10,926.32, up 4.27 points or 0.03%, and property closing at 3,855.43, up by 28.85 points or 0.75%.
Financials closed at 2,082.64, down 4.49 points or 0.21%; holding firms at 8,369.01, down 55.75 points or 0.66%; services at 1,629.96, down 5.54 points or 0.33%; mining and oil at 12,047.27, down 44.89 points or 0.37%.
Total volume traded was 1.43 billion, while total value was P6.93 billion. Decliners outnumbered advancers 109 to 83, and 50 remained unchanged.
Net foreign selling inched higher to end at P269.15 million from Tuesday’s P269.1 million. — P.P.C. Marcelo