Stocks little changed after late-session consolidation

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Local equities ended little changed on Thursday on the back of a predicted medium-term consolidation, and despite gains in morning trade.

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The benchmark PSEi was in the green during trades up to the early afternoon, but eased toward the last minute by 10.72 points or 0.15 percent to close at 7,202.06.

By contrast, the wider All Shares index registered a slight gain, picking up 0.04 percent or 1.55 points to 4,256.70.

The earlier gains in the market were byproduct of bargain hunting ahead of the Bangko Sentral ng Pilipinas (BSP) meeting until fears overtook the sentiment and pulled the market down, analysts said.

Astro del Castillo, managing director or First Grade Finance Inc., said in a phone interview that the market was down in the last moments of the Thursday trading session because it entered a medium-term consolidation phase.

“The market just went into consolidation. Investors are cautious on the BSP meeting. In the coming days, consolidation is still likely but the market is very healthy to withstand a major drop,” del Castillo said.

The announcement of a 25 basis point increase in the BSP’s benchmark interest rates occurred after the market closed.

For his part, Summit Securities President Harry Liu said via phone interview that the market is just “moving sideways to consolidation” in the medium term in order to be able to shoot upwards in the long term.

“As far as the short term is concerned, the market reached the resistance level of 7,200 to 7,300. The short term is trying to do a rally in the morning, but the market has to go into medium term consolidation,” Liu said, explaining the day’s action.

“The market was moved by certain fundamentals for morning trade, but it did not change the negative sentiment ahead of the Monetary Board meeting,” he added.

Liu said that the market will be moving sideways in the next few days, positioning to go up in the coming months and by year-end, as investors will anticipate the nine months income reports of companies.

He cited a few factors that may influence the market positively in the long term, which include the scheduled Papal visit in Manila in January next year, the start of the Asean integration, as well as the Asia-Pacific Economic Cooperation (APEC) Ministerial Meetings and Leaders’ Summit in November 2015.

“This is looked upon by the international and local business community. I think this will contribute to the market being intact in the long term,” Liu said.

He said the market is seen to trade at the range of 7,100 to 7,300 in the next few days. Long-term resistance is at 7,400 points, while support is at 6,950 to 7,000.

“As long as there are no new crisis here and abroad, and the market doesn’t break the technical support of 6,950 to 7,000, then the market is very much upward-looking for long term,” Liu said.

Sectoral indexes had a mixed day on Thursday, with three posting gains and three declining. Mining and oil rose 1.14 percent or 201.80 points to 17,926.64; industrials increased 0.32 percent or 35.11 points to 11,122.53; and property shares inched up 0.03 percent or 0.75 points to close at 2,728.40. Losers included financials, down 0.13 percent or 2.16 points at 1,674.25; holding firms, declining 0.27 percent or 16.89 points to 6,336.65; and services dipped by 0.40 percent or 8.87 points to end the day at 2,223.80.

Also, the 10 most active shares were equally split between winners and losers. Universal Robina Corp., BDO Unibank Inc., and Nickel Asia Corp. were among the blue-chips that had a positive day, while recent big gainer Philippine Long Distance Telephone Company joined Ayala Corp., and DMCI Holdings Inc. in decline for the day.

Despite the market dip, advancing issues outnumbered decliners 99 to 68, while 50 shares were unchanged. P6.67 billion in value swapped hands on Thursday, with just under 1.78 billion shares traded.

On Wednesday, the PSEi lost 40.89 points or 0.56 percent to 7,212.78, while the All Shares index likewise removed 25.66 points or 0.60 percent to close at 4,255.15.

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