PSEi slips on profit-taking

The local stock barometer slipped on Thursday but stayed afloat 7,500 as investors pocketed gains after a two-day bullish breakout rally.

The main-share Philippine Stock Exchange index shed 18.89 points or 0.25 percent to close at 7,565.32. Elsewhere in the region, stock markets were mostly lower due to jitters on the US Federal Reserve’s plan to shrink its balance sheet.

“Considering the previous days’ run-up, the market’s decline is more of a technical correction. The correction is triggered by tempered expectations that the US Fed will decelerate the pace of their rate hikes to temper their balance sheet. Locally, inflation has remained within range but may present as an area of concern should it accelerate suddenly,” said Manny Lisbona, president of PNB Securities. “For now, the key support is 7,400 and we are comfortably above it,” he said.

The profit-taking was seemingly triggered by minutes from the Federal Reserve’s March meeting which noted plans to reduce its $4.5 trillion balance sheet this year, said Luis Gerardo Limlingan, managing director at Regina Capital.

“Consistent with recent comments from Fed officials, the minutes again noted that participants see considerable uncertainty about the fiscal outlook, reporting that ‘about half’ of participants did not incorporate an explicit assumption in their projections. Additionally, a ‘number of participants’ discussed potential upside risks from financial conditions –though they also noted the possibility of downside risks in the event of a risk-off move in financial markets. Some participants also characterized equity valuations as ‘quite high,’ noting that the equity risk premium is in the bottom quartile of its historical range,” Limlingan said.

At the local market, the PSEi was dragged down by the financial, services and property counters but the most battered was the mining/oil sub-index which declined by 1.68 percent.

The industrial and holding firm counters slightly gained.

Value turnover for the day amounted to P9.53 billion. There were 91 advancers which were eclipsed by 101 decliners while 43 stocks were unchanged.

The PSEi was weighed down most by ALI and AC which both slumped by over 2 percent while PLDT and BPI also slipped by over 1 percent.

ICTSI, JG Summit, Globe Telecom and SM Prime all slipped.

On the other hand, AGI gained 3.24 percent and was the most actively traded stock for the day after reporting a 6 percent gain in net profit to P14.8 billion.

Metrobank and DMCI gained over 2 percent while SM Investments and URC were up by over 1 percent. MPI, Megaworld and Puregold also firmed up.

Outside of the PSEi, Cemex rebounded by 6.6 percent.