PSEi extends losses, sinks further below 8,000
STOCKS fell to drag the Philippine Stock Exchange index (PSEi) to a five-day low, and further away from 8,000 level, as blue chip company earnings disappointed.
The broader all-shares index, meanwhile, dropped by 1.38% or 65.30 points to 4,643.95.
“Stocks were down [yesterday] pulled down by some corporate earnings coming out. We’re the outlier in the region since most markets were up after the inauguration of the new South Korean President,” Victor F. Felix, equity analyst at AB Capital Securities, Inc., said in a phone interview.
“Net foreign buying was sustained so it means foreign funds are coming back so this is local-driven and there’s also some profit-taking after four sessions of gains,” he added.
All counters saw declines yesterday. Holding firms led the losses, dropping 2.35% or 189.21 points to end Wednesday’s session at 7,862.48 followed by industrial which was down 1.63% or 186.61 points to 11,233.44
Financials fell 1.21% or 23.48 points to 1,906.25; property slipped 0.87% or 31.26 points to 3,533.28; services declined 0.75% or 12.48 points to 1,637.31; and, mining and oil fell by 0.27% or 35.38 points to end yesterday’s session at 12,636.33;
Philstocks Financial, Inc. Senior Research Analyst Justino B. Calaycay, Jr. for his part said: “the lift has become a tad heavier as analysts and market begin to tag it a bull market.”
“Now the fundamentals, both of the broad economy and corporate, have a lot of catching up to justify valuations that once more crosses over the 20x trailing earnings. Excitement has been heightened and activity increased and the slope steepened in trades following the Holy Week break,” Mr. Calaycay said in his market note on Wednesday.
“There are two-sides to this recent run-up and subsequent slide: while the former is indeed enticing, it is not to be construed as an all-clear signal as there are still quite a number of risk events in the near term; alternatively, the relative weakness in the last two sessions is not a sign that the preceding run had no legs. It is as it has always been in the market -- a 50-50 proposition with the weights shifting in accord with which factor or influence is given preference,” he added.
Mr. Calaycay further said that “except for a handful, (so far) earnings have not been impressive thus unable to elicit enough interest to support the benchmark’s recent three-session, nearly 300-point romp.”
Yesterday saw decliners trumped advancers, 133 to 78, while 35 stocks were unchanged.
Investors traded 2.88 billion issues on Wednesday valued at P10.46 billion, higher than Tuesday’s volume.
Foreign funds bought more shares than they sold.
Analysts put the resistance level at 7,800 to 7,900 with support seen at the 7,600 to 7,700 level.