Stocks down as volume thins ahead of holidays

EQUITIES fell on Wednesday following the passage of the tax reform program, as analysts said the market has already priced in its effects earlier this year.

The benchmark index dropped 3.35 points or 0.04% to finish the session at 8,362.61.

The broader all-shares index likewise gave up 0.17% or 8.52 points to 4,893.62.

“The market has already priced in the tax reform program of the Duterte administration starting as early as the 2Q (second quarter) this year,” Timson Securities, Inc. equity trader Jervin S. de Celis, noting that the main index’s rally toward the 8,600 level earlier this year was due to optimism on the tax reform program.

“It’s also a ‘sell on news’ event and apparently foreign investors have been selling their shares due to the expensive valuations of our index. They’ll be back for sure when the effect of the TRAIN ( Tax Reform for Acceleration and Inclusion) bill is felt in the economy by next year,” Mr. De Celis added.

Regina Capital Development Corp. Managing Director Luis A. Limlingan meanwhile noted that most investors will now be taking their holiday break.

“Philippine markets were flat even though the TRAIN has been signed into law, most investors are on the sidelines already enjoying the holidays,” Mr. Limlingan said.

Sectoral counters were split between gainers and losers. Ending in positive territory were the mining and oil sector, adding 1.14% or 128.40 points to 11,330.62; services, which climbed 0.43% or 6.87 points to 1,601.23; and industrials, which gained 0.08% or 8.87 points to 11,098.60.

On the other hand, the property sub-index logged a 0.44% or 17.29- point decline to 3,882.82. Financials shed 0.17% or 3.77 points to 2,140, and holding firms dipped 0.01% or 1.45 point to 8,481.53.

Wednesday saw 830.54 million issues change hands for a total value turnover of P5.26 billion, lower than the P6.87 billion booked on Tuesday.

Decliners beat advancers, 110 to 84, as 50 names remained unchanged.

Net foreign outflows widened to P225.82 million yesterday from the P186.94 million recorded on Tuesday.

US stocks fell on Tuesday as excitement over the likelihood of a tax code revamp was offset by concern over its effect on years of monetary policy stimulus and the future of interest rates.

The US House of Representatives initially passed the tax legislation in an afternoon vote, but the bill included provisions that did not comply with Senate rules. The Senate was expected to vote this evening on a revised version of the bill, with the offending provisions removed. If the Senate approves the bill, as is expected, the House will vote again on Wednesday.

The Dow Jones Industrial Average fell 37.45 points or 0.15 % to 24,754.75; the S&P 500 lost 8.69 points or 0.32% to 2,681.47 and the Nasdaq Composite dropped 30.91 points or 0.44% to 6,963.85. •