PSE index sinks to 6,200 range on profit taking

Philippine shares slid back to the 6,200 level on Thursday due to profit taking following the market’s climb and as a weaker peso weighed on sentiment.

The Philippine Stock Exchange index (PSEi) slumped by 1.23% or 78.39 points to close at 6,288.25, while the broader all shares index fell by 0.77% or 26.76 points to end at 3,437.23.

“The local market declined as investors took profits after a two-day rise, reflecting cautiousness amid uncertainties in the Middle East and worries over the general economic outlook. The peso, which has gone back above the 61 per US dollar level, also weighed on the local market,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

Iran and the United States remain at loggerheads over efforts to agree on a permanent end to the war in the Gulf, according to a senior Iranian source, who said there had been no progress in talks to revive the interim deal agreed in June and define a time frame to implement it, Reuters reported.

The comments came as US President Donald J. Trump issued yet another broadside against Iran’s leaders, dealing a further blow to hopes for a resolution to the crisis, following new attacks on shipping in the region on Tuesday.

Uncertainty over the situation in the Middle East, which has pushed up global oil prices anew, caused the peso to end weaker on Thursday. The peso dropped by 16.3 centavos to close PHP 61.343 against the dollar from its PHP 61.18 finish on Wednesday, Bankers Association of the Philippines data showed. This was its worst finish since July 30’s PHP 61.56.

“The local index ended lower as investors reacted to the MSCI Philippine Index latest review, which triggered selling pressure on select names. The peso’s depreciation against the US dollar further weighed on sentiment, prompting a more cautious stance among market participants,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The majority of sectoral indices closed in the red. Property decreased by 3.74% or 73.56 points to 1,891.34; mining and oil went down by 2.7% or 511.11 points to 18,393.75; services retreated by 1.26% or 43.13 points to 3,376.84; holding firms dropped by 1.09% or 50.28 points to 4,556.91; and industrials slipped by 0.02% or 1.62 points to 8,111.70.

Meanwhile, financials went up by 0.13% or 2.64 points to 1,962.94.

Decliners beat advancers, 96 to 89, while 63 names were unchanged.

“Metropolitan Bank & Trust Co. was the day’s index leader, climbing 2.68% to PHP 68.95. SM Prime Holdings, Inc. was the main index laggard, plunging 7.05% to PHP 18.20,” Mr. Tantiangco said.

Value turnover decreased to PHP 14.25 billion on Thursday with 1.34 billion shares traded from the PHP 17.63 billion with 1.01 billion issues on Wednesday.

Net foreign selling was at PHP 3.45 billion, a reversal of the PHP 13.82 million in net buying recorded in the previous session. — Alexandria Grace C. Magno with Reuters