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Shares decline further as trading volume thins

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PSE bells
PHILSTAR/KRIZ OHN ROSALES

LOCAL EQUITIES fell on Monday due to thin trading, as investors stayed on the sidelines due to the high bond yields overseas.

The benchmark Philippine Stock Exchange index (PSEi) slipped 0.18% or 14.23 points to close at 7,658.05, extending last Friday’s decline.

The broader all-shares index was relatively flat after giving up 0.04% or 2.21 points to 4,662.73.

“US stocks closed mostly lower on Friday… Treasury yields also climbed higher as well, which meant this was a further boost for the US dollar. This in turn was taken negatively for the PSEi in general,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

The Dow Jones Industrial Average was flat at 24,715.09 last Friday, while both the Nasdaq Composite index and S&P 500 index dropped 0.38% to 7,354.34 and 0.26% to 2,712.97, respectively.

The local index was trading in positive territory for most of the morning session, but failed to sustain its strength until the closing bell.

“The conciliatory tone from China towards its imports of US goods lifted our market in the morning session but the bearish sentiment since the index fell last week is what caused the market to stay below 7,800 which is also serving as its short term resistance level,” Timson Securities, Inc. Equities trader Jervin S. de Celis said in a mobile message.

Sectoral indices were split between gainers and losers. The mining and oil counter went up 1.06% or 106.40 points to 10,147.54, while property rose 0.45% or 17.30 points to 3,820.58. Holding firms climbed 0.30% or 22.92 points to 7,514.16.

On the other hand, financials dropped 1.34% or 25.84 points to 1,895.75. Industrials shed 0.49% or 54.19 points to 10,897.01, while services also lost 0.49% or 7.59 points to 1,526.64.

Some 1.18 billion issues switched hands to yield to a turnover of P4.19 billion, lower than Friday’s P4.22 billion.

“Investors are still not yet ready to size up their exposure to risky assets like stocks due to trade concerns between the US and China, rising oil prices in the Middle East, and multiple rate hikes from the US Federal Reserve in the next coming meetings,” Mr. De Celis said.

Decliners prevailed for the day at 105, versus 83 advancers and 55 stocks that remained unchanged.

Net foreign outflows slimmed to P568.47 million from the P715.35 million logged last Friday.

For the rest of the week, Regina Capital’s Mr. Limlingan said investors will be looking at the release of the minutes from the Federal Open Market Committee’s May meeting, several speeches from Fed officials including Chairman Jerome Powell on Friday, and latest budget data from the Philippines on Wednesday.

Meanwhile, most other Southeast Asian stock markets rose on Monday, with Singapore gaining about 1%, after the United States and China agreed to drop their tariff threats while they work on a wider trade agreement. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.60%. — Arra B. Francia with Reuters