STOCKS fell on Monday as investors pocketed their gains from last week’s rally amid a weaker peso and following Wall Street decline on Friday.
The Philippine Stock Exchange index (PSEi) slumped by 159.45 points or 2.32% to close at 6,704.41 on Monday, while the broader all shares index went down by 57.64 points or 1.58% to 3,577.93.
“The PSEi fell 159.45 points or 2.32%, reflecting the week-ending performance of the US market, which ended in the red led by mega-cap companies and as US bond yields rose,” Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said in a Viber message.
On Friday, the Dow Jones Industrial Average fell by 292.30 points or 0.86% to close at 33,706.74; the S&P 500 lost 55.26 points or 1.29% to 4,228.48; and the Nasdaq Composite dropped by 260.13 points or 2.01% to 12,705.22.
“Profit taking after the rally last week brought the PSEi to 6,704.41, dropping 159.45 points or 2.32%. Moreover, the depreciation of the peso contributed to the negative sentiment,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“This is on the back of the expectation that the Federal Reserve could remain hawkish, which may weaken the peso. Moreover, supply concerns over some food items weighed on the sentiment,” Ms. Alviar added.
The peso closed at P55.93 per dollar on Friday, weakening by 4.2 centavos from its P55.888 finish on Thursday. It also depreciated by 32 centavos from its P55.61-per-dollar close a week earlier.
After the stock market closed, the local unit finished Monday’s trading session at P56.21 per dollar, sinking by 28 centavos from its P55.93 finish on Friday. This is the first time the peso closed at the P56-per-dollar level since late July and is its worst finish since July 22’s P56.28.
All sectoral indices ended in the red on Monday. Holding firms went down by 230.85 points or 3.46% to 6,436.98; property dropped by 88.61 points or 2.87% to 2,990.76; financials declined by 39.92 points or 2.46% to 1,581.08; mining and oil lost 192.57 points or 1.56% to end at 12,132.80; services gave up 9.99 points or 0.56% to close at 1,746.18; and industrials decreased by 31.90 points or 0.31% to 9,974.84.
Value turnover increased to P5.44 billion on Monday with 816.98 million shares changing hands, from the P5.15 billion with 1.57 billion issues seen on Friday.
Decliners outnumbered advancers, 132 versus 62, while 39 names were unchanged.
Foreigners turned sellers on Monday, with net foreign selling reaching P342.42 million from the P10.69 million in net buying seen on Friday.
“For the week, investors will turn their attention to the highly anticipated Federal Reserve annual Jackson Hole symposium on Friday, which will serve as a catalyst for a volatile week. Investors will be watching Fed Chair Jerome Powell’s latest remarks on inflation…,” Timson Securities’ Mr. Lood said.
He placed the PSEi’s support at 6,650 and resistance at 7,160, while Philstocks’ Ms. Alviar put support at 6,600 and resistance at 7,000 to 7,100. — J.I.D. Tabile