PSEi declines on profit taking, looser restrictions

STOCKS broke their four-day rally on Friday on profit taking and after the government eased quarantine restrictions despite rising coronavirus cases.   

The benchmark Philippine Stock Exchange index (PSEi) declined by 85.29 points or 1.26% on Friday to close at 6,633.22, while the all shares index lost 17.91 points or 0.43% to 4,123.72.   

“This pitstop made room for some profit taking after the index managed to recover to an intra-week high of 6,743 today, which was 6.69% higher than last Friday’s sell-off to 6,320,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message on Friday.  

“The move to take some profits also surfaced after investors saw that the NCR (National Capital Region) would be moved to MECQ (modified enhanced community quarantine), a gradual step down from the more stringent ECQ (enhanced community quarantine), but a lockdown nevertheless,” he added.   

NCR and Laguna will be under MECQ from Aug. 21 to Aug. 31, the government announced on Thursday evening.   

“Delta variant outbreak worries with the onset of looser lockdown is hounding the market,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said in a Viber message on Friday.  

All sectoral indices closed in the red on Friday. Holding firms dropped by 109.48 points or 1.62% to close at 6,609.69; property went down by 40.28 points or 1.27% to 3,119.67; financials declined by 14.21 points or 0.98% to 1,429.32; industrials shed 60.01 points or 0.61% to finish at 9,649.02; mining and oil lost 55.14 points or 0.59% to 9,149.66; and services inched down by 8.13 points or 0.49% to close at 1,635.93. 

Value turnover increased to P6.30 billion with 2.04 billion shares switching hands on Friday, from the P5.28 billion with 1.30 billion issues traded on Thursday.  

Foreigners turned sellers anew with P175.12 million seen in net outflows on Friday versus the P725.08 million in net purchases the previous day. 

Advancers outnumbered decliners, 113 versus 78, while 47 names closed unchanged.   

“We may see market to continue to be volatile at 6,200 to 6,700 next week with transmission rate at five digits,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.  

Meanwhile, FMIC’s Ms. Ulang said the PSEi may “retrace immediate support” of 6,500. 

For his part, COL Financial’s Mr. Barredo said the index’s support may be between 6,320 and 6,270, while resistance is seen around 6,757 to 7,000.   

“Some volatility from other markets, like the US, Europe and parts of Asia also brought in some circumspect action. We expect that more corrective volatility may show in some of these markets that may proceed to keep investors on the edge,” Mr. Barredo said. — Keren Concepcion G. Valmonte 

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