PSEi drops on profit taking, Wall Street’s decline

LOCAL STOCKS dropped on Tuesday to follow Wall Street’s decline overnight, with investors also pocketing gains after the bellwether’s recent rally.

The Philippine Stock Exchange index ( PSEi) gave up 72.35 points or 0.90% to finish at 7,917.89 at the start of the shortened trading week.

The wider all shares index likewise retreated, giving up 41.71 points or 0.87% to close at 4,707.42.

April Lynn L. Tan, research head of COL Financial Group, Inc., said a 72-point movement for the index is significant.

“For some people, 72 points is big,” she said. “A 72- point drop is actually a lot for them... that’s almost 1%.”

She said what likely affected the PSEi’s performance was the weakness in the US market. She added that investors might also be taking profits after the market’s rise in recent months.

“Since April, we’ve gone up by 9%. With that gain there will always be an incentive to take profit,” Ms. Tan said.

Overnight, the Dow Jones Industrial Average fell 36.30 points or 0.17% to 21,235.67; the S& P 500 lost 2.38 points or 0.10% to 2,429.39; and the Nasdaq Composite dropped 32.45 points or 0.52% to 6,175.47.

She also noted that many of blue chip firms have been “correcting,” citing stocks such as Ayala Land, Inc., Ayala Corp., SM Prime Holdings, Inc. and SM Investments Corp.

All the sector indices declined. Property stocks led the bloodbath with a 93.54- point drop or 2.47% to 3,694.27; industrials went down 122.26 points or 1.09% to 11,021.07; and services declined by 18.52 points or 1.05% to 1,735.66.

The financials, holding firms, and mining and oil counters also went down by less than a percentage point apiece.

Trading value reached P11.23 billion, up from the P8.11 billion seen on Friday, with 1.73 billion shares changing hands.

Losers outnumbered gainers at 132 to 68, while 43 stocks closed unchanged. Net foreign buying was logged at P645.58 million yesterday, down from Friday’s net purchases of P881.95 million.

Most Southeast Asian stock markets eked out gains on Tuesday as investors took a cautiously optimistic stance ahead of a US Federal Reserve policy meeting that could provide cues on the pace of rate hikes in the months to come.

A poll of 100 economists conducted last week showed the Fed was certain to push interest rates up by 25 basis points to 1.001.25% at its June 13-14 meeting.

However, the conviction for a move beyond a widely expected rise this month has faded for many forecasters along with the outlook for inflation for most.

“[ We] expect Asian bourses to continue to tread water with a topping of caution ahead of the Federal Open Market Committee (FOMC),” OCBC Bank said in a note.

The positive sentiment across the region was also supported by oil prices which edged up in early trade.— with