PHILIPPINE shares continued lower on Tuesday as investors took their cue from Wall Street’s slump overnight amid concerns about the growth outlook in China and a drop in oil prices.
Overnight, the S&P 500 lost 16.11 points or 0.8 percent, the Dow Jones fell 107.06 points or 0.6 percent, and the Nasdaq composite index dropped 52.1 points or 1.1 percent.
With no domestic incentives to spur buying, the Philippine Stock Exchange index (PSEi) dipped 8.24 points or 0.11 percent to 7,271.62 and the broader All Shares index slipped as well, down 8.72 points or 0.20 percent at 4,304.13.
Jonathan Ravelas, BDO vice president and chief market strategist, said via phone interview that the market reflected the losses on Wall Street given the lack of market-moving news domestically.
“The market is down, reflective of the drop on Wall Street. The negative sentiment in US markets hastened the profit taking in the local market,” Ravelas said.
“I think this could still be viewed as a correction. If there’s a rise on Wall Street, we’ll probably see some adjustments,” he added.
Ravelas said most investors stayed on the sidelines, anticipating third-quarter corporate earnings results by October to November and the upcoming economic briefing next week.
“The market, I think, will trade in a range of 7,200 to 7,300. If the market breaks 7,300 points, it will lead to 7,400 as the next resistance level. If it breaks 7,400 points again, the risk is to go down to as low as 7,000,” he said.
“I think the market will drop to 7,000 points by yearend. Despite the consensus of positive forecasts, we think that the market has made a lot [of gains], valuations are expensive. The rising interest rates scenario will cost companies [in terms of]interest rate expense, damaging their net income,” he added.
He said there should be no worries with the market ending at 7,000 points by the end of the year because at that level the market will “hopefully be attractive” to investors, in order for the market to reach the longer term forecast of 7,800.
Services and property were the only advancers among the sub-indices. Services rose 4.86 points or 0.22 percent to 2,217.82, while property gained 24.61 points or 0.89 percent to 2,787.98.
Among the decliners, financials slipped 0.67 points or 0.04 percent to 1,713.87; industrials lost 50.04 points or 0.44 percent to 11,372.76; holding firms retreated 57.63 points or 0.90 percent to 6,352.26; while mining and oil slumped 253.62 points or 1.41 percent or to 17,702.64.
Of the 10 most actively traded stocks on Tuesday, four were gainers—Ayala Land Inc., Bloomberry Resorts Corp., Energy Development Corp. and Megaworld Corp.—while six were losers.
The six biggest losers were Philippine Long Distance Telephone Co., Alliance Global Group Inc., Nickel Asia Corp., Ayala Corp., SM Investments Corp. and Universal Robina Corp.
Total volume stood at 2.3 billion shares valued at P8.36 billion. Decliners outnumbered advancers, 102 to 73, while 49 shares were unchanged.
On Monday, the PSEi dipped 7.43 points or 0.10 percent to 7,279.86 although the wider All Shares index managed to eke marginal gains, up 3.12 points or 0.07 percent at 4,312.85.