PSEi snaps 4-day rally as investors take profits

PHILIPPINE STOCKS closed lower on Wednesday as investors took profits after a four-day rally.

The benchmark Philippine Stock Exchange index (PSEi) fell by 0.93% or 69.59 points to close at 7,362.62. The broader all-share index shed 0.6% or 23.86 points to 3,939.64.

“The market pulled back as investors took profits from its recent rallies,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said in a Viber message. “Prior to the decline, the market was on a four-day gaining streak.”

The PSEi reached as high as 7,441.99 intraday before settling at the 7,300 level. The market recently received a boost after the recent policy easing by the US Federal Reserve, which could be matched by the local central bank.

“Profit taking occurred in the local equity market after several days in the oversold region, as traders adopted a cautiously optimistic stance amid expectations that China’s recent policy measures may have stemmed its stock market slump, with hopes for additional fiscal support on the horizon,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

On Tuesday, China’s central bank announced its biggest stimulus since the coronavirus pandemic to bring the country’s economy back toward the government’s growth target.

People’s Bank of China Governor Pan Gongsheng told a news briefing the central bank would in the near future reduce the reserve requirement ratios (RRR) — the amount of cash banks must hold as reserves — by 0.5 percentage point. The move is expected to free up about 1 trillion yuan ($142.4 billion) for new lending.

He also hinted that the RRR could be slashed by 0.25-0.5 percentage point later this year depending on liquidity conditions.

Back home, almost all of the market’s sectoral indices fell. Financials went down by 2.02% or 48 points to 2,324.48, while services shed 0.71% or 16.04 points to 2,234.75. Holding companies lost 0.54% or 34.34 points to 6,261.62, while property shed by 0.42% or 12.56 points to 2,977.40. The industrial index dropped by 0.16% or 16.44 points to 9,739.89.

On the other hand, mining and oil rose by 2.82% or 241.07 points to 8,773.20.

Value turnover reached P8.05 billion covering 1.07 billion shares, lower than P11.79 billion covering 1.02 billion stocks traded on Tuesday.

Decliners beat advancers 99 to 97, while 57 stocks were unchanged.

Net foreign buying decreased to P921.22 million compared with the P2.99 billion worth of net foreign inflows on Tuesday. — Revin Mikhael D. Ochave