Stock Market

Main index drops below 8,000 on profit taking

Posted on August 02, 2017

THE Philippine Stock Exchange index started the so-called “ghost month” on a negative note, as investors resorted to profit-taking following the market’s 8,000-level performance last week and the slower manufacturing data for the month of June.

The 30-member bellwether index dropped by 1.39% or 111.45 points to close at 7,906.60 on Tuesday, extending the previous day’s slump.

The broader all shares index likewise declined by 0.90% or 42.95 points to 4,723.91.

“It’s usually the weakest month of the year because as you know it’s the ghost month. Secondly, it’s the start of the vacation for most of the Western markets, so volume of trading goes down, and so there’s more of the profit-taking,” Diversified Securities, Inc. equities trader Aniceto K. Pangan said in a phone interview on Tuesday.

Mr. Pangan also cited the release of Nikkei Philippines’ manufacturing purchasing managers’ index for the month of June, which showed a slower performance at 52.8 against the 54.3 recorded in May.

“It shows that the manufacturing slowed down in the month of June. So if we went up substantially during the past week, investors saw it as a means to go on profit taking,” he added.

“Philippine markets continued the sell-off during the traditionally weakest month of the year, sinking more than 100 points on Tuesday. This went against the Dow Jones industrial average hitting a record high on Monday as Wall Street rose on the back of a good earnings season,” Regina Capital Development Corp. Luis A. Limlingan said in a mobile phone message.

The Dow Jones Industrial Average hit a record closing high on Monday, helped by Boeing, while selling in Facebook, Alphabet and other technology companies checked the S&P 500 and pulled the Nasdaq lower. Overnight, the Dow Jones Industrial Average rose 0.28% to end at 21,891.12 points and the S&P 500 lost 0.07% to 2,470.3. The Nasdaq Composite dropped 0.42% to 6,348.12.

All domestic sector counters ended the session in negative territory, with the property sector posting the sharpest decline at 2.24% or 85.19 points to 3,713.78. The industrial sub-index followed, falling 1.20% or 134.05 points to 11,012.15. Holding firms likewise went down 0.96% or 77.2 points to 7,916.68; financials closed 0.85% or 16.78 points lower at 1,952.27; services dropped 0.52% or 8.75 points to 1,667.72; while the mining and oil counter lost 0.36% or 47.10 points to end at 12,828.68.

Value turnover was logged at P6.18 billion on Tuesday, down from the previous session’s P7.93 billion, with 864.59 million issues changing hands.

Decliners outpaced advancers, 114 to 86, while 48 names were unchanged. Net foreign selling ballooned to P330.80 million yesterday from Monday’s net outflow of P94.41 million.

Most other Southeast Asian markets were subdued in lackluster trade ahead of the release of a clutch of global economic data. -- Arra B. Francia with Reuters