PHL stocks drop on profit taking, hawkish Fed

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

PHILIPPINE SHARES closed in the red on Thursday on profit taking and as investors stayed on the sidelines on expectations that the US Federal Reserve would raise interest rates earlier than expected.

The 30-member Philippine Stock Exchange index (PSEi) went down by 49.83 points or 0.67% to end at 7,369.27. The all shares index also dropped 22.27 points or 0.56% to 3,913.27.

“Investors may have chosen to take profits off the table after the past few days of positive performance of the market,” Darren Blaine T. Pangan, trader at Timson Securities Inc., said in a Viber message.

Mr. Pangan said some Asian markets also dropped due to cautiousness following Fed officials’ hawkish comments.

Asian tech stocks rose on Thursday, following their US-listed peers, though broader gains were capped by the strength of the US dollar as investors bet on interest rates rising more quickly in the United States than other major economies, Reuters reported.

Japan’s Nikkei rose 0.8%, helped by gains in tech stocks such as Sony, which rose 1.5%, while Hong Kong’s bruised tech index snapped six sessions of losses to gain 0.85%, versus a 0.25% gain in the local benchmark.

Other share moves were more muted however. MSCI’s broadest index of Asia-Pacific shares outside Japan traded either side of flat, and was last 0.06% higher.

“Philippine shares succumbed to profit taking ahead of the US holiday and after the release of the recently published US Federal Reserve’s minutes, which showed that central bankers were open to speed up the tapering amid inflation worries,” Luis A. Limlingan, head of sales at Regina Capital Development Corp. said in a Viber message.

Minutes of the US central bank’s Nov. 2-3 policy meeting showed on Wednesday that various policy makers said they would be open to speeding up the taper of their bond-buying program if high inflation held, and move more quickly to raise interest rates.

Back home, majority of sectoral indices closed in the red on Thursday except for mining and oil, which jumped 57.58 points or 0.60% to 9,587.32; and industrials, which added 11.30 points or 0.10% to finish at 10,704.90.

Meanwhile, holding firms fell 80.59 points or 1.12% to 7,085.13; financials decreased 12.21 points or 0.75% to 1,608.80; services lost 9.70 points or 0.48% to 2,009.78; and property dropped 13.41 points or 0.39% to 3,387.68.

Value turnover decreased to P8 billion on Thursday with 1.31 billion issues switching hands from the P8.62 billion with 1.47 billion shares traded on Wednesday.

Decliners bested advancers, 126 against 62, while 51 remained unchanged. Foreigners turned sellers, posting P542.81 million in net outflows on Thursday versus the P36.98 million in net purchases seen on Wednesday.

“[Friday] being the last trading day of the week, we’ll have to see if support at 7,060 holds, otherwise, resistance may be pegged at 7,454.50,” Timson Securities’ Mr. Pangan said. — M.C. Lucenio with Reuter

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