Local shares retreated again on Wednesday, slipping out of the 7,100 area on continued profit taking.
The bellwether Philippine Stock Exchange index (PSEi) lost 1.51 percent or 107.16 points to end at 7,001.51 while the broader All Shares dipped by 1.05 percent or 44.27 points to close at 4,184.28.
Philstocks Financial Inc. research associate Claire Alviar said the main index’s performance was the opposite of Wall Street’s, which saw the Dow Jones, S&P 500 and Nasdaq jump overnight by 1.54 percent, 1.62 percent and 1.31 percent, respectively.
“A reversal candlestick showed last Monday after the short-term uptrend, which was confirmed by yesterday’s (Tuesday’s) decline, made investors booked more gains today,” Alviar explained.
The P1.39-billion net foreign selling the market posted also weighed on sentiment, she said.
Despite this, Alviar said investors still forward to the economy’s recovery.
“The market climbed so fast in the past few days, which brought it to the overbought level, which now resulted in a decline due to profit-taking,” she said.
AAA Equities Head of Research Christopher Mangun also attributed the decline to profit taking, saying the pullback was expected, as the PSEi gained more than 22 percent in the last three weeks.
“The correction is healthy for the market’s uptrend as it relieves selling pressure, as well as lets other investors buy in at lower prices,” he said.
He added that large-cap property firms Ayala Land Inc. and SM Prime Holdings Inc.
dragged local shares as they contracted by 3.21 percent and 3.12 percent, respectively.
According to Mangun, the bourse might continue to drop toward its next support level of 6,850 if the 7,000 support would not hold in the next session.
Most local sectors again closed lower, with property losing the most at 2.62 percent. Mining and oil sector was the exception, rising by 3.41 percent.
Total volume turnover was at 8.03 billion shares, valued at P14.07 billion.
Decliners outpaced advancers, 120 to 97, while 40 securities were unchanged.