PHL shares drop on profit taking, rise in oil prices

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

PHILIPPINE shares fell on Monday on profit taking due to inflation concerns as global oil prices continued to climb.

The 30-member Philippine Stock Exchange index (PSEi) dropped by 78.07 points or 1.07% to close at 7,211.54 on Monday, while the broader all shares index lost 25.86 points or 0.57% to end at 4,436.84.

“PSEi corrected lower after global oil prices remain elevated, lingering among seven-year high, that could lead to some uptick in inflation,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message.

“Wider budget deficit data, the widest in four months, also partly led some healthy profit taking in the local stock market, as this could lead to more government borrowing and debt stock,” Mr. Ricafort added.

Oil prices rose further on Monday, with US crude hitting a seven-year high as global supply remained tight amid strong demand worldwide, Reuters reported.

Brent crude rose 0.83% to $86.24 a barrel, while US crude rose 0.80% to $84.51.

Meanwhile, the government’s budget deficit widened by 30% to P180.9 billion in September from P138.5 billion a year earlier as spending overtook a smaller increase in revenue collection, the Bureau of the Treasury reported on Monday. This was also 49.6% higher than the P120.9-billion gap seen in August.

Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message that the market finished lower as investors were cautious and chose to stay on the sidelines ahead of the release of more third quarter earnings of companies and US gross domestic product (GDP) data.

Traders are waiting for US third quarter GDP figures due Thursday with a weak print likely to weigh on the dollar.

Majority of sectoral indices declined on Monday, except for financials, which went up 3.50 points or 0.22% to 1,555.75, and services, which gained 3.82 points or 0.2% to 1,878.44.

Meanwhile, property gave up 82.42 points or 2.45% to end at 3,272.16; holding firms dropped 113.74 points or 1.55% to 7,213.68; mining and oil declined by 52.03 points or 0.49% to 10,456.09; and industrials went down 28.79 points or 0.27% to close Monday’s trading session at 10,644.61.

Value turnover amounted to P5.57 billion on Monday with 913.57 million shares switching hands, higher than the P5.32 billion with 785.36 million issues traded on Friday.

Decliners beat advancers, 120 to 75, while 55 names ended unchanged on Monday.

Net foreign buying was at P79.74 million yesterday, a reversal of the P17.86 million in net outflows logged on Friday.

RCBC’s Mr. Ricafort put the PSEi’s immediate support at 7,000 and its next resistance at 7,400 to 7,500.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said via text that the benchmark index could move from 7,000 to 7,450 this week. — BADA with Reuters

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