PSEi slips as investors pocket profits from rally

The main index declined on Monday as investors pocketed their gains after the bellwether’s ascent to the 6,400 level late last week.

The benchmark Philippine Stock Exchange index (PSEi) went down by 2.94 points or 0.04% to end at 6,475.50 on Monday, while the broader all shares index climbed by 6.59 points or 0.19% to close at 3,416.14.

“The index closed slightly lower as selling pressure emerged in the 6,500 area. In terms of technicals, the market is nearly overbought after last week’s rally, so some traders have started to take profits,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“News flows were also not that favorable as US Federal Reserve officials tempered expectations of interest rate cuts next year,” Mr. Colet added.

AB Capital Securities, Inc. Vice-President Jovis L. Vistan said “initially positive momentum waned as the trading session drew to a close.”

“Local stock prices concluded marginally lower as the index confronted a technical resistance at around the 6,500 level. The market commenced with strength, buoyed by increasing optimism that global interest rates had topped out,” Mr. Vistan said in a Viber message.

Just days after a Federal Reserve meeting that penciled in an ample course of interest rate cuts next year, which in turn unleashed a broad rally in financial markets, one of the US central bank’s top policy makers pushed back on the ebullience on Friday, Reuters reported.

“We aren’t really talking about rate cuts right now,” New York Fed President John Williams said in an interview with CNBC. When it comes to the question of lowering rates, “I just think it’s just premature to be even thinking about that” as the central bank continues to mull whether monetary policy is in the right place to help guide inflation back to its 2% target, he said.

The PSEi finished the session almost flat as stocks consolidated, “with investors making moves ahead before the end of the year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

Sectoral indices were split on Monday. Industrials fell by 85.14 points or 0.95% to 8,878.28; financials dropped by 15.38 points or 0.89% to 1,705.19; and holding firms went down by 35.27 points or 0.55% to 6,359.89.

Meanwhile, property rose by 49.41 points or 1.75% to 2,860.79; services increased by 18.67 points or 1.19% to 1,582.53; and mining and oil went up by 13.13 points or 0.13% to 9,534.99.

Value turnover went down to PHP 5.4 billion on Monday with 602.65 million issues changing hands from the PHP 10.2 billion with 897.2 million shares on Friday.

Advancers outnumbered decliners, 100 against 77, while 46 names ended unchanged.

Net foreign buying rose to PHP 625.25 million on Monday from PHP 448.43 million on Friday.

AB Capital’s Mr. Vistan put the PSEi’s support at 6,300 and resistance at 6,530 for the rest of the week. — S.J. Talavera with Reuters