Stocks decline on profit taking ahead of holiday
LOCAL SHARES ended in negative territory on Thursday as investors took profits ahead of the long weekend and sought to digest the newly passed Bayanihan II economic stimulus package.
The bellwether Philippine Stock Exchange index (PSEi) fell 36.72 points or 0.6% to 6,005.40 while the broader all-shares index went down 18.30 points or 0.51% to 3,573.06.
Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a mobile phone message that Thursday’s trading was due to positive investor sentiment on the passage of the economic stimulus bill dubbed Bayanihan to Recover as One Act or Bayanihan II that aims to help the economy recover from the effects of the coronavirus disease 2019 (COVID-19) pandemic.
“The market had a swingaround, reverting back to the 6,000 level at its closing. Most of the day the market has breached below its 6,000 level, with an intraday low at 5,962.64,” Mr. Tan said.
The Congress Bicameral Conference Committee approved on Wednesday the final version of the Bayanihan II bill. Some P140 billion in funding has been approved for the stimulus package while P25 billion will serve as standby funds.
Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the market’s close on Thursday was affected by the US Federal Reserve’s tepid economic outlook for the rest of the year and their call for more fiscal assistance amid the COVID-19 pandemic.
“The Federal Reserve pointed at an uneven recovery, tempering optimism over a second-half economic rebound and appearing to back off from a readiness to clarify its rate guidance, as minutes from their July meeting showed,” Mr. Limlingan said in a mobile phone message.
Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan echoed Mr. Limlingan, adding investors chose to take profits before the holiday.
All sectoral indices ended in negative territory on Thursday. Mining and oil shrank 137.65 points or 2.36% to 5,682.91; financials retreated 15.07 points or 1.31% to 1,130.94; property declined 20.58 points or 0.7% to 2,884.63; services fell 9.93 points or 0.68% to 1,450.27; industrials dropped 27.18 points or 0.34% to 7,792.26; and holding firms dipped 14.13 points or 0.22% to 6,247.05.
Decliners bested advancers, 131 to 64, while 46 names ended unchanged. Trading value was at P4.05 billion on Thursday with 1.50 billion shares changing hands, against Wednesday’s P5.47-billion worth of 1.36 billion shares.
Foreigners remained as sellers, logging a net outflow of P357.30 million which was less than the P850.23 million the previous day.
“Next week, we may have to confirm if the market has formed a base above the 6,000 support area. Otherwise, 5,600 would be the next support, while 6,200 remains the immediate resistance level,” Timson’s Mr. Pangan said.