THE MAIN INDEX extended its decline on Monday, moving opposite its regional peers, as investors continued pocketing profits following last week’s rally to the 7,000 level.
The benchmark Philippine Stock Exchange index (PSEi) ended Monday’s session at 6,918.05, down 51.83 points or 0.74% from its close on Friday. The broader all shares index likewise trimmed 10.18 points or 0.24% to end at 4,073.37.
“The PSEi ended lower as selling pressure picked up, which was to be expected after that massive rally that we saw at the end of last week. Investors are taking profits while prices remain at their eight-month highs,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.
The PSEi opened Monday’s trading at 6,991.39, its highest level for the session, and hit a low of 6,857.89 intraday. It eventually started moving higher at the close on the back of last-minute buying.
The local market’s performance puts it behind its regional peers, nearly all of which were faring in green territory on Monday following the signing of the Regional Comprehensive Economic Partnership (RCEP) over the weekend.
The RCEP is considered the world’s largest free trade agreement as it includes China, Australia, New Zealand, Japan, South Korea and all 10 ASEAN member countries. The Philippines expects it to improve the country’s economic engagements, Trade Secretary Ramon M. Lopez said.
But for investors in the PSE, selling pressure was heavier than the optimism that the RCEP supposedly brought to markets. However, Mr. Mangun said he thinks this slowdown is for the better.
“This pullback is extremely beneficial for the market’s uptrend as it relieves pressure. It may continue even lower in the coming sessions to test support at 6,700,” Mr. Mangun said.
He noted the above-average trading volumes, which stood at 2.36 billion issues valued at P8.77 billion on Monday, still shows investors are confident in the market.
Most sectoral indices posted losses at the close of trading. Mining and oil dropped 139.84 points or 1.68% to 8,159.10; property shed 49.42 points or 1.4% to 3,479.17; holding firms fell 63.42 points or 0.87% to 7,152.37; and services trimmed 7.38 points or 0.47% to close Monday’s session at 1,533.69.
Meanwhile, among Monday’s gainers were industrials, which picked up 37.04 points or 0.4% to 9,109.23; and financials, which added 1.58 point or 0.11% to 1,328.15 at the close of the session.
Advancers outnumbered decliners, 119 against 109, while 30 names ended Monday’s session unchanged.
Net foreign selling continued for a second day, growing to P1 billion on Monday from P676.71 million in the previous session. — Denise A. Valdez
