PHL shares snap rally on profit taking, virus fears
THE benchmark index ended its four-day winning streak, closing in the red on Thursday on profit taking following developments in the coronavirus disease 2019 (COVID-19) situation in the country.
The Philippine Stock Exchange index (PSEi) went down by 60.27 points or 0.86% to close at 6,882.49 on Thursday, while the broader all shares index declined by 23.54 points or 0.56% to 4,163.22.
“The rally that we have been seeing in the last few days is confirmed to be more of a correction after several weeks of decline instead of higher valuations due to the rollout of vaccines or easing of restrictions,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail. “The market’s general trend is still sideways as the sentiment remains cautious due to the uncertainty of the economy’s recovery.”
“Inflation worries arising from the various stimulus measures in many economies and rising COVID-19 cases caused by the South African variant in Pasay could mean a repeat of last year’s economic ordeal as a worst case,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message.
External developments also continued to affect the market, another analyst said.
“The rise in the US bond yields and the elevated inflation expectations here at home weighed on investor sentiment triggering Thursday’s profit taking,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“Trading volumes were also notably lighter [on Thursday]…, possibly due to investor caution ahead of the February inflation report due out [on Friday],” China Bank Securities Corp. Research Head Rastine Mackie D. Mercado said in an e-mail.
Value turnover fell to P7.11 billion yesterday with 2.7 billion shares switching hands from the P34.09 billion with 221.53 billion shares seen the previous day.
Majority of sectoral indices declined on Thursday, except for industrials, which rose by 17.21 points or 0.19% to close at 8,834.05.
Mining and oil dropped 182.41 points or 1.97% to finish at 9,076.89; property fell by 45.34 points or 1.28% to 3,477.62; holding firms went down by 82.77 points or 1.15% to 7,083.48; financials lost 6.08 points or 0.41% to end at 1,473.69; and services inched down by 1.51 points or 0.1% to 1,449.37.
Decliners outnumbered advancers, 119 against 110, while 40 names closed unchanged.
Net foreign selling also rose to P627.63 million on Thursday from the P350.57 million seen on Wednesday.
PNB Securities’ Mr. Lisbona said the market could close at 6,612 today, placing the PSEi’s immediate resistance at the 7,000 level.
“Trading [on Friday] may take cue from the February consumer price index data, which is set to be released. A February inflation print, which nears or exceeds the upper end of the Bangko Sentral ng Pilipinas’ projection which is at 5.1%, may cause a sell-off since it would intensify concerns towards the price level situation in our country,” Philstocks Financial’s Mr. Tantiangco said. — K.C.G. Valmonte