Equities 3 MIN READ

Stocks fall on profit taking as market eyes leads 

May 22, 2023By BusinessWorld

PHILIPPINE SHARES closed lower on Monday due to profit-taking, with investors staying on the sidelines as they await progress in the US debt ceiling talks and fresh leads.

The bellwether Philippine Stock Exchange index (PSEi) fell by 43.72 points or 0.65% to close at 6,620.83 on Monday, while the broader all shares index went down by 14.34 points or 0.4% to end at 3,534.03.

“The PSEi closed lower, cutting short its positive momentum last Friday, as investors take profit ahead of the crucial US debt ceiling talks later tonight (Philippine time),” Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said.

“Part of it can be also attributed to a technical correction after the index flirted with a key resistance level of 6,700 last Friday,” Mr. Temporal added.

AB Capital Securities, Inc. Vice-President Jovis L. Vistan likewise said in a Viber message that stocks fell due to profit taking.

“The lack of volume also means there’s little bid and ask volume, which tends to create price volatility on either side,” Mr. Vistan said.

“The local bourse lost 43.72 points (0.66%) to 6,620.83 amid concerns over the US debt ceiling. Investors will be waiting for any developments on the matter, as its resolution or lack thereof could significantly impact the economy and the market. There was also a lack of catalysts to drive the market upwards,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

US President Joseph R. Biden and House Republican Speaker Kevin McCarthy were set to meet to discuss the debt ceiling on Monday after the two leaders held a phone call on Sunday as the president flew back to Washington that both sides described as positive, Reuters reported.

Less than two weeks remain until June 1, when the Treasury department has warned that the federal government could be unable to pay all its debts, a deadline US Treasury Secretary Janet Yellen reaffirmed on Sunday. A failure to lift the debt ceiling would trigger a default that would cause chaos in financial markets and spike interest rates.

Back home, all sectoral indices fell on Monday except for mining and oil, which rose by 8.54 points or 0.08% to 10,305.36.

Meanwhile, financials declined by 20.93 points or 1.11% to 1,858.13; property went down by 19.52 points or 0.7% to 2,736.68; industrials shed 64.28 points or 0.67% to end at 9,436.44; holding firms fell by 29.50 points or 0.44% to 6,583.76; and services decreased by 5.32 points or 0.33% to 1,571.63.

Value turnover rose to PHP 7.03 billion on Monday with 1.73 billion shares changing hands from the PHP 5.77 billion with 21.32 billion issues traded on Friday.

Decliners outnumbered advancers, 116 versus 67, while 47 names closed unchanged.

Net foreign buying surged to PHP 2.84 billion on Monday from the PHP 298.73 million seen on Friday.

AB Capital Securities’ Mr. Vistan placed the PSEi’s support at 6,500 and resistance at 6,800. — A.H. Halili with Reuters

This article originally appeared on bworldonline.com

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