Shares drop on strong US jobs data, rebalancing
STOCKS dropped on Monday due to positioning following strong US jobs data and ahead of the index and MSCI rebalancing.
The benchmark Philippine Stock Exchange index (PSEi) fell 76.05 points or 1.02% to close 7,380.30 on Monday, while the broader all shares index slipped 34.33 points or 0.87% to finish 3,899.61.
“Some Asian markets were lower as well after seeing strong jobs numbers from the US, one that may keep the US Federal Reserve aggressive into its stand in controlling inflation by raising rates. This may have spooked some investors for the moment,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message.
Asian share markets mostly eased on Monday after stunningly strong US jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Fed, Reuters reported.
The cautious mood saw MSCI’s broadest index of Asia-Pacific shares outside Japan dip 0.3%. Japan’s Nikkei fell 0.8% and South Korea 0.4%.
The January payrolls report showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring.
“Investors rebalanced portfolios ahead of the PSEi realigned on Friday, and took bets ahead of the release of the Morgan Stanley Capital International (MSCI) rebalancing results later in the week,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
Last week, the PSE announced MONDE and EMP will be part of the index effective Feb. 14 after the regulator’s review of the index and sectoral indices’ performances from the first to last trading days of 2021.
Meanwhile, MSCI is set to announce the results of its index rebalancing, which it reviews quarterly and adjusts twice a year.
Philstocks Financial, Inc. Senior Research Analyst Japhet Louie O. Tantiangco said the pullback shows investors are waiting for more catalysts, such as the release of more corporate financial reports.
Mr. Tantiagco also noted that Monday’s trading was strong, with value turnover increasing to P9.21 billion with 1.13 billion shares switching hands on Monday from the P8.64 billion with 1.75 issues traded on Friday.
Most sectoral indices ended in the red except for financials, which gained 15.71 points or 0.90% to 1,752.83 and mining and oil, which climbed 87.70 points or 0.83% to 10,640.45.
On the other hand, holding firms fell 135.58 points or 1.87% to 7,100.18; property went down 59.06 points or 1.77% to 3,267.99; industrials declined by 131.47 points or 1.21% to 10,694.37; and services lost 3.89 points or 0.19% to 1,958.13.
Decliners beat advancers, 105 versus 84, with 51 names closed unchanged.
Foreigners turned buyers, logging P222.55 million in net purchases versus the P25.76 million in net outflows seen on Friday. — M.C. Lucenio with Reuters
