Shares snap 3-day rally as investors pocket gains

STOCKS snapped their three-day rally on Thursday as investors resorted to profit-taking ahead of the release of companies’ earnings results for the first half.

The 30-member Philippine Stock Exchange index dropped 68.56 points or 0.86% at the close of yesterday’s trading to end at 7,904.34, after reaching an intraday high of 8,001.59.

The broader all shares index also declined by 37.13 points or 0.77% to close at 4,738.83.

“I think today’s retreat was just within the normal ebb and flow of the index. We’re treading the relatively tight range, (with) resistance at 8,020 and support at 7,900,” Frank Gerard J. Barboza, equity trader at Angping & Associates Securities, Inc., said in a mobile phone message on Thursday.

For his part, Regina Capital Development Corp. Managing Director Luis A. Limlingan noted the lack of sufficient leads to propel substantial movements in the market.

“Investors could not find enough impetus for the market to break past 8,000 once again as it touched this intraday [and] hence succumbed to profit taking,” Mr. Limlingan said.

“On the other hand, US stocks closed at record highs on Wednesday as investors sifted through the country’s housing data and a batch of corporate quarterly reports. Earnings season has gotten off to a solid start,” Mr. Limlingan said.

The major US stock indexes closed at record highs on Wednesday helped partly by technology stocks. The Dow Jones Industrial Average rose 66.02 points or 0.31% to 21,640.75; the S&P 500 gained 13.22 points or 0.54% to 2,473.83; and the Nasdaq Composite added 40.74 points or 0.64% to 6,385.04.

At home, the mining and oil sector was the lone sub-index that posted gains, although at a minimal 0.18% or 23.4 points to 12,883.40.

Holding firms led the losing counters with a drop of 1.29% or 103.13 points to 7,851.39; followed by property with a decrease of 1.18% or 44.56 points to 3,728.82. Services declined 0.47% or 8.03 points to 1,680.38; industrials slipped 0.41% or 46.71 points to 11,199.01; and financials closed 0.15% lower at 1,956.3.

Decliners trumped advancers, 131 to 63, while 65 issues were unchanged.

A total of 2.51 billion issues changed hands for a value turnover of P8.21 billion, higher than Wednesday’s P7.89 billion.

Net foreign selling was logged at P126.14 million yesterday, a reversal of the previous session’s net buying worth P158.11 million.

“No big macro news as of the moment, everyone’s eyes are on the coming SONA (State of the Nation Address). After that we will be anticipating the earnings season,” Angping & Associates Mr. Barboza said.

Other Southeast Asian stock markets were also sluggish on Thursday ahead of a meeting by the European Central Bank, with investors looking for cues on how it will unwind unconventional policy that has kept borrowing costs at rock bottom. — Arra B. Francia with Reuters