Shares reverse Tuesday’s gains on lack of catalysts
THE Philippine Stock Exchange index (PSEi) on Wednesday failed to extend the previous day’s gains, easing by 19.19 points or 0.24% to finish at 7,857.18 as shares continued consolidation in the absence of any market-moving news, analysts said.
“We should be wary of [the peso’s] weakness as this may dampen sentiment for stocks,” he added, as the peso weakened 0.4% from the preceding day and 1.57% from end 2016 to finish P50.50 to the dollar yesterday.
The broader all-shares index dropped 7.27 points or 0.15% to 4,697.20.
Luis A. Limlingan, business development head at Regina Capital Development Corp., said the market fell below Tuesday’s finish as it tracked Wall Street’s decline under the weight of technology stocks and a reversal of oil prices’ recent gains.
But Mr. Limlingan said equities should not “swing too much on a lack of strong catalysts.”
Harry G. Liu, president of Summit Securities, Inc., said he expects the market to be “a bit soft” technically in the short to medium term.
“Watch for the long-term support at 7,700/7,880,” he said, adding that he expects PSEi’s resistance at 8,030-8,300.
“A break above or below the support or resistance range can trigger a move on our market,” he said, adding that the market has been waiting for a “good news catalyst” to fuel its up.
At the same time, Mr. Liu said: “We have been consolidating on the medium term for quite some time, so a move should be coming.”
He said investors should watch the situation in Marawi City, which is now on its fifth week as government forces move door to door to flush out extremists aligned with the Islamic State, movement in the country’s credit rating, the exchange rate between the peso and US dollar, fate of tax reforms that are crucial to helping fund the government’s P8-trillion infrastructure build, as well as developments overseas.
“The market is a confidence barometer -- a summary of our economic and political outlook,” he said.
Yesterday saw four of the six sector indices retreat, led by property stocks which slipped by 25.41 points or 0.69% to finish at 3,639.83. Financials dropped by 7.11 points or 0.36% to 1,936.56, industrial stocks went down by 38.83 points or 0.35% to 10,980.96, while services slipped by 0.94 points or 0.05% to 1,732.37.
Holding firms gained 11.74 points or 0.15% to 7,827.16, while mining and oil rose 65.23 points or 0.51% to end at 12,651.68.
Value turnover dropped 27.55% to P6.64 billion from Tuesday’s P9.17 billion. Losers outnumbered gainers 104 to 88, while 50 stocks closed unchanged.
Foreign funds remained net sellers, although the day’s P198.74 million was less than a third of Tuesday’s P718.52 million. -- Victor V. Saulon