Philippine shares retreated under pressure from profit-takers on Thursday, a day after the benchmark index entered the 7,700-point record territory. The decline was also in line with weakness in the Asian markets.
Bryan Gomez, co-head of investment at Citisecurities Inc., said the market “traded in lower volumes today as profit-taking continued despite a three-day rally in the US, and a surprise triple R cut in China. Asia has been weak overall, including Japan.”
The People’s Bank of China on Wednesday night announced a surprise cut in banks’ Reserve Requirement Ratio.The latest RRR cut brought the rate down to 19.5 percent for most large banks and released about $100 billion into the system to boost the Chinese economy.
The Philippine Stock Exchange index (PSEi) fell 0.54 percent or 41.82 points to 7,674.24, while the All Shares index dropped 0.23 percent or 10.29 points to 4,470.99.
Joyce Anne Ramos, analyst at AB Capital Securities Inc., said the market sought a clearer direction after recently hitting all-time highs and while it awaited the central bank’s next move on interest rates and the release of more full-year corporate earnings results.
Luis Limlingan of Regina Capital Development Corp. said the market was also weighed down by reports that the European Central Bank (ECB) would no longer accept low-rated Greek government debt papers as collateral for regular central bank loans.
Analysts have been quoted as saying that would result in a major blow to Greece on its attempts to rewrite the terms of its 240-billion euro bailout program.
“Also, we’re prone to profit-taking given that the market recorded highs in the past few days,” Limlingan said.
“In the next few days, the market will just be trading sideways while awaiting the conclusion of the earnings season. It is likely to go higher [at the end of the earnings results season],” he added.
Services and mining and oil ended in positive territory—gaining 0.53 percent and 0.56 percent, respectively. Subindices that finished in the red were led by property, which dropped 1.16 percent.
Only PLDT, Globe Telecom and Puregold posted gains among the most actively traded stocks, while JG Summit Holdings Inc. ended flat and the rest were losers.
The biggest decliners included SM Investments Corp., Universal Robina Corp., Ayala Land Inc., Energy Development Corp., First Gen Corp. and Megaworld Corp.
Volume of trade reached 1.18 billion, valued at P9.82 billion. Decliners outnumbered advancers 94 to 87, while 38 issues closed unchanged.
On Wednesday, the main PSEi rallied past 7,700 points in morning trade, before recording a new intraday high of 7,738.12 in the afternoon. Gains eased soon after and the PSEi ended at a record close of 7,716.06 — up 1.35 percent or 102.91 points. The All Shares index rose 1 percent or 44.30 points to 4,481.28.