The local stock market index retreated on Thursday after several days of establishing new records, as investors booked profits. A consolidations also looks probable in the next few days.

The Philippine Stock Exchange index (PSEi) fell 1.19 percent, or 72.61 points to 6,018.57, while the broader all-shares index went down by 0.96 percent, or 36.68 points to 3,798.61.

“[The index went] lower on profit-taking on concerns of valuations. It’s about time for the market to take a pause. Support is at 5,960. If it holds, it could retry the recent high. Otherwise, it may test the 5800/5850 levels,” Jonas Ravelas, chief market strategist of Banco De Oro Unibank Inc., said.

In a phone interview, Harry Liu, president of Summit Securities Inc., said that the market was just going through a phase of consolidation.

“This short-term consolidation phase may last until the middle of next week,” he said.

Liu added that despite the market falling by more than 1 percent, the correction could still be considered “healthy,” since the index has been breaking records during the past few days.

Jun Calaycay, analyst at Accord Capital Equities Corp., meanwhile, said that local share prices drew its own path, seemingly in utter disregard of its peers in Asia and the US.

He said despite the gains of the Dow Jones overnight, and a rather strong surge in markets across the Asian region, the PSEi caved in to selling pressures, snapping a six-day record breaking run from the time trading opened this year.

“Absent negative news, the day’s fall may be largely attributed to profit-taking. The last seven sessions, counting the closing trades of December, have given investors gross return of 5.11 percent, representing substantial multiples versus alternative fixed income assets,” he said.

All sub-indices down
All the sub-indices also corrected headed by the financials counter, which posted the largest decline, falling 1.77 percent, or 28.12 points to 1,560.64.

Holding firms decreased 1.28 percent, or 69.54 points to 5,370.42, followed by mining and oil sector, which shrank 1.11 percent, or 232.24 points to 20,672.48.

The industrial counter ended in the red as well, declining 0.75 percent, or 68.69 points to 9,147.53, while services dipped 0.69 percent, or 12.28 points to 1,775.51. Property was almost flat with a 0.59-percent drop, or 14.11 points to 2,373.38.

This time, losers beat gainers, 120 to 52, while 40 shares were unchanged.

Calaycay added that with the market correction, trades moving forward will be a test of investors’ faith in the promising outlook for the year.

“If the late rebound is any indication, we may see a restoration of the upward momentum soon enough. If the decline extends further and the index drops below the 6,000 mark, some apprehension may arise which may keep the bulls taking on a moderate stance,” he said.

“We, however, continue to hold that further drops in the index, in general and in specific stock prices in particular, should make equities even more attractive,” Calaycay added.

On Wednesday, the PSEi disregarded the forecasts that it will yield to a correction, even peaking to a new record, almost reaching the 6,100-point resistance level.

The index climbed to a new record, rising 0.70 percent, or 42.28 points to 6,091.18, while the broader all-shares index closed 0.57 percent higher, or 21.64 points to 3,835.29. The index also on Wednesday registered a new intra-day high at 6,095.07 during the morning session.