By Denise A. Valdez, Senior Reporter
LOCAL SHARES surrendered to profit taking on Tuesday following a rally that brought the main index to its highest level since the coronavirus pandemic started.
The Philippine Stock Exchange index (PSEi) shed 69.95 points or 0.97% to close the session at 7,108.67. The broader all shares index also trimmed 25.71 points or 0.6% to end at 4,228.55.
“The market was down today on profit-taking after it moved up substantially on the last two trading sessions on overbought condition,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Tuesday.
“With a lofty valuation of the PSEi despite the higher contraction in GDP (gross domestic product) in the third quarter than estimated, the market is bound to correct as what happened today,” he added.
Despite the weaker-than-expected economic backdrop, the market’s decline on Tuesday is necessary to help it maintain a stronger momentum, AAA Southeast Equities, Inc. Research Head Christopher John Mangun said.
“The PSEi ended with substantial losses as selling pressure picked up, which was to be expected as it hovered around its eight-month high, Mr. Mangun said in an e-mail.
“Trading volumes came in at a whopping P12.4 billion, more than double the daily average of about P6 billion as investors remain confident in the current environment,” he added.
Value turnover stood at P12.95 billion with 8.27 billion issues switching hands, higher than the previous day’s P11.93 billion with 10.3 billion issues.
But after the correction on Tuesday, Mr. Mangun said the PSEi “may rebound and begin to move higher” on the back of optimism that quarantine restrictions will be further eased before December.
Contrary to the local market, other Asian stocks were treading in green territory on Tuesday due to another positive news of a coronavirus disease 2019 (COVID-19) vaccine.
On Monday, news wires reported that United Kingdom-based AstraZeneca Plc has seen a 70% success rate in its COVID-19 vaccine. This followed news in the prior weeks that the COVID-19 vaccines of Pfizer, Inc. and BioNTech SE and Moderna, Inc. were similarly recording positive results.
Nearly all sectoral indices at the PSE posted losses on Tuesday. Mining and oil dropped 140.43 points or 1.66% to 8,276.43; holding firms lost 109.89 points or 1.48% to 7,314.40; industrials cut 136.17 points or 1.46% to 9,178.32; services fell 17.01 points or 1.09% to 1,540.36; and financials slid 3.17 points or 0.21% to 1,474.40.
Property was the only index that posted gains, improving 9.84 points or 0.27% to close at 3,566.62 on Tuesday.
Decliners outnumbered advancers, 134 against 101. Some 40 names ended unchanged.
Net foreign selling grew to P621.19 million on Tuesday from P351.89 million in the previous session.