Stocks dip as cautious investors await key events

Philippine shares closed lower on Monday on negative market sentiment amid concerns overseas including Moody’s Investors Service’s downgrade of its outlook on the United States’ credit rating.

The benchmark Philippine Stock Exchange index (PSEi) went down by 45.75 points or 0.74% to close at 6,116.14 on Monday, while the broader all shares index lost 21.34 points or 0.64% to end at 3,295.52.

“Stocks experienced a modest decline after testing a critical resistance point at the 6,200 level. The latter was marked by the resistance of a downward trend line and the 50-day simple moving average,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

“The market sentiment was further influenced by global concerns, triggered by Moody’s Investors Service’s decision to downgrade its outlook on the credit rating of the US,” Mr. Vistan added.

China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said the index’s drop was likely due to continued profit taking after last week’s surge and while investors stay cautious ahead of the scheduled Morgan Stanley Capital International index review results on Tuesday.

“Despite today’s move, prospects of a follow-through rally remain in play, especially as today’s downtick was accompanied by the lowest value turnover for the year,” Mr. Mercado said in an e-mail.

Meanwhile, Philstocks Financial, Inc. Research Analyst Claire T. Alviar said that investors were in “a wait-and-see mode” anticipating key events such as the US inflation data, the key rate meeting of the Bangko Sentral ng Pilipinas, and the upcoming meeting between US President Joseph Biden and Chinese President Xi Jinping.

“Market participation was notably subdued, with a net market value turnover of only PHP 1.29 [billion]. At least for this year, this was the lowest recorded net value turnover,” Ms. Alviar said.

Value turnover went down to PHP 1.37 billion on Monday with 285.31 million shares changing hands from the PHP 2.76 billion with 311.90 million issues seen on Friday.

All sectoral indices dropped on Monday. Mining and oil went down by 137.09 points or 1.41% to 9,556.04; services sank by 19.13 points or 1.27% to 1,476.87; property decreased by 23.53 points or 0.89% to 2,604.58; financials lost 13.01 points or 0.73% to 1,751.38; industrials shed 34.49 points or 0.39% to 8,608.23; and holdings firms dipped by 22.98 points or 0.39% to 5,855.02.

Decliners outnumbered advancers, 106 versus 57, while 52 shares closed unchanged.

Net foreign selling went up to PHP 270.92 million on Monday from PHP 62.12 million recorded on Friday.

“If the market posts an uptick tomorrow, then we may see the index push higher towards the 6,300 level,” Mr. Mercado said.

Mr. Vistan placed the PSEi’s support at 6,000 and resistance at 6,200. — Sheldeen Joy Talavera