Local stocks registered their second consecutive drop for the week as “external jitters,” particularly the United States Federal Reserve tapering, affected the market.
The Philippine Stock Exchange index (PSEi) decreased by 1.20 percent, or 74.27 points to 6,105.23, while the wider all-shares index went down by 0.88 percent, or 33.21 points to 3,733.61.
Astro del Castillo, First Grade Finance managing director, told The Manila Times in a telephone interview that the market drop was caused by concerns over the possible tapering of the Federal Reserve’s bond-buying program.
He also said that there has been more profit-taking throughout the session that caused the drop in the PSEe.
COL Financial Technical analyst Juanis Barredo agreed with del Castillo, saying that there is “nothing” new with the Fed tapering issue affecting US and European markets, which in turn would affect other equity marts.
“The Philippines is still trying to look for a foothold in support and will be under critical support watch from its recent low of 5,900 [points]area,” Barredo said.
For his part, Harry Liu, Summit Securities Inc. president, said that the drop in US stocks was factored in, as well as domestic issues such as the pork barrel scam and the rehabilitation efforts in the Visayas region hit by Super Typhoon Yolanda.
“[Market] is due for a correction because it has been up for a while and will have to consolidate,” Liu said through a text message.
“For local market, investors still watch [out for]the [pork barrel]scam and the devastation rehabilitation,” he added, citing the start of the month of December where there is usually medium-term consolidation.
Liu further said that the market should not go below 6,000 points.
All the sectoral indices went down with financials plummeting by 1.63 percent, or 24.72 points to 1,487.88, while industrial skidded by 0.95 percent, or 83.31 points to 8,734.38.
Holding firms went down by 0.63 percent, or 35.41 points to 5,592.57, and services fell by 1.05 percent, or 20.25 points to 1,910.
Also, mining and oil descended by 0.41 percent, or 49.98 points to 12,139.29, while property registered a decline of 1.73 percent, or 41.54 points to 2,357.57.
Among the most actively traded shares, GT Capital Holdings, Travellers International Hotel Group and SM Prime Holdings ended in the green while those that registered losses include SM Investments, Philippine Long Distance Telephone Co., Ayala Land, Universal Robina, Metropolitan Bank and Trust Co., Bank of the Philippine Islands and Alliance Global Group.
Decliners prevailed over advancers, 84 to 58, while unchanged issued stood at 34.
Volume of traded stocks hit 657.4 million while value turnover reached P5.4 billion.
Liu said that though market is at lower levels at present, the PSEi “will be far better” throughout 2014.
On Tuesday, the PSEi dropped for the first time after a five-day uptrend. The benchmark index shed 0.70 percent, or 43.87 points to 6,179.50. Meanwhile, the broader all-shares index also slid by 0.71 percent, or 26.89 points to 3,766.82.