PSEi sinks below 7,000 mark as market corrects

By Denise A. Valdez, Senior Reporter

LOCAL SHARES closed lower on Thursday, ending below the 7,000 mark, as investors continued to pocket gains and as global markets weakened overnight.

The benchmark Philippine Stock Exchange index (PSEi) dropped 73.76 points or 1.05% to close at 6,927.75, while the broader all shares index lost 46.19 points or 1.1% to end at 4,138.09.

The index opened the session at 6,987.32, down from the previous day’s close of 7,001.51. This was already its best showing for the session.

Meanwhile, the PSEi sank to as low as 6,843.11 intraday.

“The local bourse extended its decline… as the market’s correction continued (and was) weighed further by the drop of the US markets overnight,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message.

The market’s decline on Thursday was the third consecutive day that the PSEi posted losses. It follows about three weeks of an uptrend in the bourse, which brought the PSEi to a level that was last reached in February, before the coronavirus lockdown started.

“After a short term rally in the past few days, the market is now correcting as it is overvalued… (The price-to-earnings ratio) is around 28x, which is higher than the 5-year average of around 20x. Traders booked more gains, resulting in the decline of the market,” Ms. Alviar said.

While the PSEi closed lower against the last session, AAA Southeast Equities, Inc. Research Head Christopher John Mangun noted that its decline softened in the final minutes of Thursday’s trading.

“The pullback of DJIA (Dow Jones Industrial Average) index overnight also spilled negative sentiment in the market amid higher weekly US jobless claims versus the prior week,” Ms. Alviar said.

The DJIA and S&P 500 indices gave up 0.58% and 0.16% on Wednesday, while the Nasdaq Composite rose to 0.48%.

“There may be some concerns on whether quarantine restrictions will be lifted by the end of November. We remain confident that the government will ease restrictions and allow more mobility as new coronavirus cases continue to decline,” Mr. Mangun added.

All sectoral indices at the PSE closed lower on Thursday: mining and oil by 237.71 points or 2.77% to 8,320.53; services by 30 points or 1.96% to 1,496.74; property by 48.04 points or 1.38% to 3,425.33; holding firms by 84.15 points or 1.16% to 7,138.19; financials by 15.85 points or 1.07% to 1,456.42; and industrials by 11.02 points or 0.12% to 9,063.22.

Some 3.28 billion issues valued at P15.49 billion switched hands on Thursday, down from the last session’s 8.03 billion issues worth P14.07 billion.

There were more decliners than advancers, 148 against 69, while 46 names ended unchanged.

Net foreign buying continued to grow, reaching P2.29 billion on Thursday from P1.39 billion the previous session.