Shares drop as investors pocket gains from rally

SHARES snapped their three-day rally on Thursday as investors pocketed gains and after Nikkei Asia’s coronavirus disease 2019 (COVID-19) recovery report put the Philippines in last place.

The Philippine Stock Exchange index (PSEi) declined by 106.15 points or 1.50% on Thursday to close at 6,951.30, while the all shares index shed 54.29 points or 1.23% to finish at 4,354.85.

“The index pulled back a day after breaking its 7,000 resistance and may have to redo this resistance challenge after closing back at 6,951,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message.

“The local bourse fell this Thursday… as investors took profits out of its preceding three-day rally,” Japhet Louis O. Tantiangco, senior research and engagement supervisor at Philstocks Financial, Inc., said in a separate Viber message.

“Nikkei Asia’s COVID-19 Recovery Index, in which the Philippines ranked last, also weighed on market sentiment,” he added.

The Philippines placed last in Nikkei Asia’s report, which ranked 121 countries based on their COVID-19 situation in terms of managing infections, vaccination programs, and social mobility. A higher ranking means the country is close to achieving recovery.

Majority of sectoral indices closed in the red on Thursday except for financials, which rose 13.28 points or 0.92% to 1,444.09. COL Financial’s Mr. Barredo noted that BDO Unibank, Inc., Metropolitan Bank & Trust Co., and Bank of the Philippine Islands were some of the issues that “saw some demand come their way.”

“[Wilcon Depot, Inc.], as [a] soon to be new index stock, seesawed, shooting up to P40 at one moment then faltering back to P34.00 closing with an 8% gain for the day. It would soon replace FGEN (First Gen Corp.) on the index roster,” Mr. Barredo said.

The PSE said on Wednesday that First Gen will be replaced by Wilcon in the 30-member PSEi following the former’s announcement about its tender offer. First Gen will also be excluded from the PSE’s Industrial index.

Meanwhile, services lost 63.10 points or 3.12 % to 1,954.03; holding firms shaved off 154.75 points or 2.20% to 6,872.98; mining and oil went down by 162.09 points or 1.66% to 9,601.65; industrials declined by 70.54 points or 0.67% to 10,371.44; and property inched down by 6.05 points or 0.19% to 3,067.33.

Value turnover increased to P13.17 billion with 1.40 billion shares switching hands on Thursday, up from the P9.55 billion with 2.71 billion issues traded the previous day.

Decliners beat advancers, 137 against 62, while 46 names closed unchanged.

Net foreign selling climbed to P1.47 billion on Thursday from the P356.05 million seen on Wednesday.

“We still think rotational action may continue and could cause ongoing choppy sways into the index and its attempt to regain fresh recent highs,” Mr. Barredo said. “Market resistance is pegged at 7,064 followed by 7,400, short-term support is seen between 6,925 to 6,840.” — Keren Concepcion G. Valmonte