PHL shares extend decline as correction continues

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SHARES continued their decline on Wednesday, ending a strong month that saw nine fresh peaks with what analysts welcomed as a healthy correction.

PHL shares extend decline as correction continuesThe bellwether Philippine Stock Exchange index (PSEi) dropped back to the 8,700 level yesterday, giving up 1.64% or 146.47 points to finish at 8,764.01.

The all-shares index likewise declined 1.34% or 69.81 points to close at 5,124.83.

Timson Securities, Inc. Marketing Head Mark Levinson R. Koa noted that the weakness in global markets continued to affect the local bourse, citing a 300-point decrease in the Dow Jones Industrial Average (DJIA) on Tuesday.

The DJIA lost 1.37% to finish at 26,076.89, with the Nasdaq Composite Index and S&P 500 also declining by 0.86% to 7,402.48 and 1.09% to 2,822.43, respectively. Investors were focused on rising bond yields, as well as on news of competition in the health care sector after Amazon, Berkshire Hathaway, and JPMorgan Chase disclosed plans to form an independent health care company for their employees in the US.

“This pullback is not really surprising given that the PSEi gained more than 500 points since the start of the year,” Mr. Koa said in a text message.

The main index kicked off 2018 with a new record close, jumping to 8,724.13 on the first trading day and thereafter posting eight other all-time high finishes, the latest being its move past the 9,000 mark at 9,058.62, recorded last Jan. 29.

Intraday, the market reached as high as 9,078.37 this month.

In a separate text message, Eagle Equities, Inc. President Joseph Y. Roxas said the market’s decline was a “healthy correction.”

Services was the lone sub-index that was up yesterday, climbing 0.23% or 4.05 points to end at 1,710.73.

Holding firms posted the day’s biggest decline, going down 2.52% or 231.96 points to 8,957.81, followed by property that lost 2.2% or 88.82 points to 3,939.56. Financials dropped 0.89% or 20.05 points to 2,223.98; mining and oil shed 0.61% or 73.57 points to 11,937.95; while industrials dipped 0.49% or 58.47 points to 11,790.56.

Decliners outpaced advancers, 142 to 61, while 52 issues were unchanged.

Total transactions for the day were valued at P11.53 billion after some 2.99 billion issues switched hands. This is higher than the P10.05-billion value turnover recorded last Tuesday.

Foreign investors were net sellers for the fourth consecutive day, with net sales of P2.33 billion, up from Tuesday’s P2.02 billion.

A market note by COL Financial Group, Inc. said the market’s support level was within the range or 8,711 to 8,565. If broken, the brokerage firm said the index may look for the next support between 8,443 and 8,275.

Most Southeast Asian stock markets also fell on Wednesday as the recent spike in global bond yields weighed on equities. — Arra B. Francia with Reuters