THE MAIN INDEX corrected on Tuesday as investors chose to take profit while others stayed on the sidelines, waiting for the results of the trade talks between the United States and China.
The benchmark Philippine Stock Exchange index (PSEi) fell 1.09% or 85.54 points to close at 7,702.12 yesterday, snapping its four-day winning streak. The broader all-shares index also dropped 0.8% or 37.80 points to 4,634.17.
“Investors are still in a wait and see mode as they await the results of the fresh trade talks between US and China,” Unicapital Securities, Inc. Technical Analyst Cristopher Adrian T. San Pedro said via text.
US and Chinese officials resumed talks in Beijing, with US Commerce Secretary Wilbur Ross predicting on Monday that the world’s largest economies would reach a trade deal that they could “live with”.
“On a technical perspective after encountering resistance at 7,900.70 [on Monday], most investors took the opportunity to take profits [on Tuesday],” Mr. San Pedro added.
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez also attributed the PSEi’s decline to profit-taking, noting the thinner turnover of only P6.03 billion versus Monday’s P8.41 billion.
The PSEi failed to mirror the positive performance of Wall Street overnight. The Dow Jones Industrial Average firmed up 0.42% or 98.19 points to 23,531.35; the S&P 500 index gained 0.70% or 17.75 points to 2,549.69; while the Nasdaq Composite index also jumped 1.26% or 84.62 points to 6,823.47.
Most Southeast Asian markets declined on Tuesday as investors remain skeptical about a resolution to the long-drawn Sino-US trade war despite positive comments on the ongoing negotiations.
Further dampening the mood, a US guided-missile destroyer sailed near disputed islands in the South China Sea as the talks began on Monday, in what China called a “provocation”.
Back home, all sectoral indices moved to negative territory, with the property counter posting the biggest loss at 1.75% or 69.14 points to 3,870.61.
The mining and oil sub-index dropped 1.36% or 121.73 points to 8,779.25; financials plunged 0.91% or 16.39 points to 1,773.41; holding firms stumbled 0.9% or 68.88 points to 7,579.23; services slumped 0.89% or 13.42 points to 1,482.02; while industrials slipped 0.44% or 50.65 points to 11,308.17.
Net foreign buying persisted, albeit at a smaller P152.33 million versus Monday’s P1.22-billion net inflow.
Decliners beat advancers, 118 to 69, while 44 names were unchanged.
“With foreign buying easing, and with 7,900 looking to be a tough nut to crack, initial support to look out for the next few days should be at the PSEi’s 200-day MA (moving average) around 7,500,” Papa Securities’ Mr. Perez said.
“I expect the index to range between 7,637 support and 7,900 resistance in the short term with the possibility of testing 8,000 and 8,200 if we hold above 7,800,” Unicapital’s Mr. San Pedro said. — Arra B. Francia