PHL stocks extend slump as investors exit market

THE LOCAL MARKET continued its downtrend yesterday on bargain hunting and as foreign selling persisted, putting the benchmark index deeper in the red for the year.

The benchmark Philippine Stock Exchange index (PSEi) gave up 14.33 points or 0.2% to close trading at 6,857.15 on Tuesday from 6,871.48 on Monday. The bellwether index is now almost a hundred points lower than its end-2015 close of 6,952.08.

The broader all shares index also declined 7.59 points or 0.18% to end at 4,163.33 yesterday from Monday’s 4,170.92.

“We saw a technical rebound in the morning and some buying relief but in the afternoon session, stocks dipped due to strong selling pressure from foreign investors which local investors were not able to support,” Luis A. Limlingan, business development head at Regina Capital Development Corp., said in a telephone interview on Tuesday.

“The decline was really mainly due to net foreign selling…which I guess is due to the increased likelihood of rate hike next month. So there’s positioning ahead of the aggressive fiscal expansion in the US in line with the Trump administration,” he added.

Locally, Mr. Limlingan said the weak third-quarter earnings results of big companies also dragged the main index down.

Lexter A. Azurin, head of research at Unicapital Securities, Inc., said trading yesterday was mainly “earnings driven.”

“We saw bargain hunting in the market which was dictated by third quarter results, where we are getting mixed results from major companies. It’s mainly earnings driven. Investors continue to reassess their portfolio on companies that have reported weak results,” he said.

Foreigners continued to dump their shareholdings with net sales reaching P1.33 billion yesterday, albeit lower than Monday’s net outflow worth P1.69 billion.

Sectoral sub- indices were mixed yesterday. Industrials led those in the red with a 166.45- point or 1.5% decline to 10,893.49; services was down 10.02 points or 0.76% to 1,301.20; while holding firms lost less than a point to end at 6,986.32.

On the other hand, financials gained 8.80 points or 0.51% to close at 1,708.98; mining and oil was up 72.81 points or 0.62% to 11,750.29; and property saw an uptick of 0.06 point to 3,004.72.

Value turnover went up to P7.698 billion yesterday from Monday’s P7.34 billion after 786.834 million shares changed hands. Decliners beat advancers, 112 to 72, while 42 issues were unchanged.

For today, Mr. Azurin said the PSEi could trade at the 6,7506,850 level and investors may continue to flee to safer havens amid continued uncertainty.

Regina Capital’s Mr. Limlingan, for his part, said net foreign selling may continue with the PSEi seen to move within 6,8007,000.

“It seems like we haven’t seen the market bottom out yet and we might continue to see net foreign selling persist the next few days,” he added.