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Shares drop as market sentiment turns cautious

STOCKS declined on Tuesday as investors remained cautious, while some cashed out ahead of holidays in observance of Holy Week.

The Philippine Stock Exchange index (PSEi) went down by 62.23 points or 0.94% to end at 6,545.55 on Tuesday. The all shares index likewise dropped by 22.23 points or 0.55% to close at 3,965.86.

“The PSEi took a step back and ended lower as traders took profits from the minor rally in the previous session,” AAA Southeast Equities, Inc Research Head Christopher John J. Mangun said in a Viber message.

The PSEi’s decline was caused by uncertainty in the market, he said.

“The losses were not because of panic selling as investors may have gained some optimism from the President’s announcement of cash stimulus and the removal of restrictions for the private sector to bring in their own supply of vaccines,” Mr. Mangun added.

President Rodrigo R. Duterte approved the proposal of the Department of Budget and Management for aid amid tighter restrictions on movement under which P1,000 per person and not more than P4,000 per family will be allocated. The approved proposal will cost some P23 billion, which will be financed through the Bayanihan to Recover as One Act.

“The general sentiment remains cautious amid the uncertainty on the extension of stricter quarantine on the country’s capital,” Mr. Mangun said.

He noted that the market traded lower than usual “due to the uncertain environment.”

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said investors are booking ahead to the trading break for the holidays on Thursday and Friday to commemorate Holy Week and investors are choosing “to keep in cash in the meantime.”

Majority of the PSE’s sectoral indices declined on Tuesday, except for industrials, which gained 88.98 points or 1.03% to 8,654.48.

Meanwhile, property lost 69.99 points or 2.09% to close at 3,279.42; financials went down by 21.35 points or 1.5% to 1,399.34; services slumped by 10.48 points or 0.72% to 1,430.25; holding firms fell by 36.67 points or 0.55% to finish at 6,606.75; and mining and oil declined by 31.08 points or 0.36% to 8,559.87.

Value turnover went down to P4.7 billion on Tuesday with 1.5 billion issues traded, from the P7.27 billion with 2.88 billion shares switching hands on Monday.

Decliners narrowly outnumbered advancers, 104 versus 103, while 46 names closed unchanged.

Foreigners turned sellers anew, with net outflows totaling P483.34 million on Tuesday against the P30.43 million in net purchases seen the previous trading day.

“Market will continue to be volatile, consolidating within a narrow range 6,400-6,500 with a downward bias due to the lockdown duration uncertainties, eliciting rating agencies’ warning on [the] Philippines’ credit rating,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message. — Keren Concepcion G. Valmonte

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