SHARES dropped on Tuesday as concerns over the country’s economic recovery continued to dampen sentiment, which led to foreigners exiting the market and lower trading volume.
The Philippine Stock Exchange index (PSEi) declined by 32.91 points or 0.51% to close at 6,356.47 on Tuesday, while the broader all shares index dropped by 19.96 points or 0.50% to 3,910.32.
“The market ended lower with lackluster trading volume, persistent foreign selling activity, and as investors chose to stay on the sidelines as they wait for confirmation on the government’s decision about the lockdown measures to be implemented in May,” Darren Blaine T. Pangan, trader at Timson Securities, Inc., said in a Viber message.
Value turnover went down to P4.61 billion on Tuesday with 1.88 billion shares traded from the P5.42 billion seen on Monday with 4.51 billion issues switching hands.
Meanwhile, net foreign selling declined to P652.52 million on Tuesday, from P700.13 million in net outflows recorded on Monday.
“Selling pressure did not pick up significantly which is why losses are minimal, but the lack of interest from buyers due to the uncertainty on the economy’s recovery, is the reason why prices keep going lower,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said via e-mail. “Fears of tighter restrictions for the coming weeks remain which may urge more selling in the coming sessions.”
China Bank Securities Corp. Research Associate Jason T. Escartin added that trading remained “quiet” as investors waited for the arrival of more coronavirus vaccine doses and ahead of April inflation data.
“We think current price levels already factor in short-term uncertainties such as: the possibility of intermittent lockdowns, pending mass vaccination, and persisting elevated inflation levels coming from public discussions over pork import policy,” Mr. Escartin said via e-mail. “Valuations may improve once an increase in vaccine arrivals gives credence to the prospect of mass inoculation… Any improvement in April’s inflation print following a jump in pork import volumes last month may also generate positive sentiment, in our view.”
Majority of sectoral indices went down on Tuesday, except for mining and oil, which gained 1.43% or 129.85 points to end at 9,189.33.
Meanwhile, property shaved off 0.99% or 31.06 points to 3,086.55; financials gave up 0.48% or 6.81 points to close at 1,392.84; services declined by 0.35% or 5.15 points to 1,430.98; holding firms went down by 0.27% or 17.39 points to finish at 6,424.24; and industrials lost 0.21% or 18.09 points to 8,587.74.
Decliners outperformed advancers, 119 against 83, while 51 names closed unchanged.
“We’ll have to see if support at 6,200 holds this week,” Timson Securities’ Mr. Pangan said. “If broken, 6,000 may be considered the next support area.”
Meanwhile, AAA Southeast Equities’ Mr. Mangun said support is at 6,325, “but it may continue even lower towards its stronger support of 6,170.” — Keren Concepcion G. Valmonte