PHILIPPINE SHARES declined on Monday on profit taking after the market’s four-day climb, with the peso’s recent weakness also weighing on sentiment.
The benchmark Philippine Stock Exchange index (PSEi) declined by 0.79% or 49.66 points to close at 6,214.83, while the broader all shares index went down by 0.3% or 11.52 points to end at 3,729.29.
“The local market declined as investors took profits following a four-day rally. The peso’s weak position against the US dollar also weighed on the bourse,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a market report.
The peso returned to the P57 level against the greenback last week as market players took positions following the US Federal Reserve’s much-awaited rate cut and hints of more reductions this year. On Monday, the peso gained 9.4 centavos to close at P57.056 per dollar.
Foreign outflows also pulled the bourse down, he added. Net foreign selling was at P343.27 million on Monday, a reversal of the P223.27 million in net buying recorded on Friday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that while the drop seen on Monday can be considered “healthy profit taking” after the market’s recent gains, there was some caution in the market due to domestic concerns related to alleged corruption in government projects and US President Donald J. Trump’s latest statements about trade, immigration, and fiscal policy.
Investors are also awaiting more clarity about the Fed’s future policy actions, he said.
Asian stocks drifted higher and the dollar steadied on Monday, with markets weighing the US Federal Reserve’s monetary policy path after a rate cut last week, while Mr. Trump’s immigration crackdown on worker visas kept sentiment in check, Reuters reported.
On the macroeconomic front, investors remain keen to gauge the US monetary policy path after the Fed indicated a gradual easing phase in the future, with traders pricing in 44 basis points of easing in the two policy meetings left for the year.
A host of policymakers are expected to speak in the week, while data on the Fed’s preferred gauge of inflation is due on Friday that will help set the tone for the near-term rate outlook.
Sectoral indices ended mixed on Monday. Financials fell by 2.14% or 46.40 points to 2,119.96; holding firms sank by 0.68% or 35.02 points to 5,097.24; and property went down by 0.41% or 10.25 points to 2,433.21.
Meanwhile, mining and oil increased by 1.65% or 192.89 points to 11,856.85; services climbed by 0.24% or 5.61 points to 2,273.41; and industrials inched up by 0.01% or 1.35 points to 8,934.91.
Value turnover went down to P5.01 billion on Monday with 1.19 billion shares traded from the P14.3 billion with 2.11 billion stocks that changed hands on Friday.
Market breadth was positive as advancers outnumbered decliners, 113 to 90, while 51 names were unchanged. — A.G.C. Magno with Reuters
