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Stocks decline on concerns over US-Syria tensions

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Facade of the new Philippine Stocks Exchange headquarters in Taguig City on Monday, February 19, 2018. (KJ ROSALES)

LOCAL SHARES fell on Monday, as investors stayed on the sidelines amid growing concerns on the United States’ attacks against Syria.

The benchmark Philippine Stock Exchange index (PSEi) dropped 0.37% or 29.73 points to close at 7,870.25 yesterday, settling below the 8,000 mark for the second consecutive day.

The broader all-shares index likewise lost 0.48% or 23.37 points to end at 4,771.28.

“The market traded in the red today after some initial strength in the morning following weakness in the US markets last Friday,” Papa Securities Corp. trader Gabriel F. Perez said in an e-mail on Monday.

Concerns over the US’ military attacks against Syria dragged down Wall Street indices last Friday. Over the weekend, the US and its allies warned Syria of further missile attacks should it once again make use of chemical weapons, despite no signs of retaliation from Russia, Syria’s backer.

Following this, on Friday, the Dow Jones Industrial Average was down by 0.50% or 122.91 points to 24,360.14. The S&P 500 index edged 0.29% lower or 7.69 points to 2,656.30, while the Nasdaq Composite index slipped 0.47% or 33.60 points to 7,106.65.

However, Asian indices seemed unperturbed by the geopolitical tensions, with majority posting gains on Monday.

Back home, five sectoral indices suffered losses, led by services that shed 1.08% or 17.78 points to close at 1,617.88. Mining and oil followed with a 0.65% or 72.75-point decline to 11,096.06; holding firms dipped 0.52% or 41.61 points to 7,867.22; industrials went down 0.42% or 48.2 points to 11,208.38; while financials gave up 0.37% or 7.54 points to 2,021.09.

Property was the lone sectoral counter that went up, adding 0.27% or 10.03 points to 3,614.96.

Some 1.68 billion issues switched hands, translating to a value turnover of P4.77 billion, thinner than Friday’s P6.09 billion.

“Pullbacks on low volume are generally regarded as weak movements. So this shouldn’t be regarded as a definite sign that the index’s low and support of 7,834 will be breached [on Tuesday],” Papa Securities’ Mr. Perez said.

Decliners outpaced advancers, 130 to 68, while 49 names remained unchanged.

Foreign investors turned buyers on Monday, netting purchases worth P139.71 million, reversing Friday’s net foreign outflows worth P829.5 million.

Moving forward, analysts said investors will be looking at the first-quarter performance of listed firms.

“I think investors are more focused on companies’ performances this first quarter, specifically on how TRAIN (Tax Reform for Acceleration and Inclusion) law will affect not just companies but the overall economy,” IB Gimenez Securities, Inc. Research Head Joylin F. Telagen said via text.

“This first-quarter earnings will I think determine market direction in the next few weeks and the index will possibly move toward an appropriate valuation,” Ms. Telagen said. — Arra B. Francia