Stock Market

PSEi dives further below 7,900 as selling persists

Posted on August 26, 2016

PHILIPPINE shares lost for a third straight day, pulling the Philippine Stock Exchange Index (PSEi) further away from 7,900 territory amid investor caution over where US interest rates are headed.

Federal Reserve chief Janet L. Yellen is due to speak today before the annual Jackson Hole symposium, the culmination of a week when Philippine financial markets stayed quiet as investors await signals on further monetary tightening by the US central bank.

The PSEi gave up 11.59 points or 0.15% to close at 7,854.54. In contrast, the all-shares index inched up by 1.16 points or 0.03% to 4,663.79. Four of the six sectoral indices finished lower.

“If we fall below the recent low 7,850, we can test the next support at 7,6850 to 7,350,” said Nisha S. Alicer, chief equity analyst at DA Market Securities, Inc., referring to the PSEi.

She also said the “dip” of the main index would be an opportunity to buy stocks. expected the market yesterday to move in step with Wall Street’s overnight performance “as no major news are expected to boost market sentiment for the day” ahead of Ms. Yellen’s speech.

Asian stocks edged higher on Thursday but clung to recent well-worn trading ranges while the dollar held firm against regional currencies before that global central bankers’ meeting.

Market expectations have increased that Ms. Yellen might indicate a clearer time frame for the next U.S. rate hike after strong housing data this week and hawkish comments by other Fed officials, but many analysts expect her to strike a more neutral stance. said the “sideways to down bias may also be rooted on the repercussions of the recent adjustments in the indices and the imposition of new tax proposals as some are still digesting the overall impact of these in their portfolios.”

URC finished unchanged at P179.50 after it was dragged down the other day by news that it was facing an excise tax on sweetened beverages by January 2017, with a yearly 4% increase, Ms. Alicer earlier said.

The online arm of F. Yap Securities, Inc. suggested to trade within a range, and expected support at 7,830 and resistance at 7,930.

The market’s trading value dropped to P7.46 billion from P9.97 billion, while advancers slightly edged out decliners at 98 to 97, with 44 issues closing unchanged.

Foreign selling again outpaced buying, resulting in a net selling of P1.06 billion worth of shares, or lower than the previous day’s P1.49 billion.

The services sector was the biggest gainer among the sectoral indices as it gained 20.64 points or 1.32% to close at 1,579.27. Industrial stocks also finished higher by 46.38 points or 0.39% to 11,877.74.

Financials, holding firms, mining and oil, and property retreated by 0.52%, 0.21%, 0.60% and 0.49%, respectively. -- VVS