Shares decline on recession fears, profit taking

SHARES dropped on Thursday on profit taking as sentiment was dampened by recession fears and Wall Street’s decline.

The benchmark Philippine Stock Exchange index (PSEi) went down by 32.85 points or 0.46% to close at 7,062.01 on Thursday, while the broader all shares index inched down by 5.83 points or 0.15% to end at 3,686.68.

“The PSEi gapped down at the open today as rising investor concerns on slowing global growth dampened sentiment. This may have also led to a resurgence of selling pressure, with investors securing more gains,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail on Thursday.

“Philippine shares weakened along with the rest of the region, due to some profit taking weighed by earnings miss by Goldman Sachs Group, Inc.,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

US economic data and their impact on Wall Street also affected market sentiment.

Goldman’s profit for the fourth quarter was at $1.19 billion, or $3.32 per share, which missed the Street estimate of $5.48 per share.

Meanwhile, the S&P 500 and the Dow lost almost 2% on Wednesday, their biggest daily drops in more than a month, after weak economic data fueled recession worries while hawkish comments from US Federal Reserve officials soured investor moods further, Reuters reported.

Before the market opened, US economic data showed retail sales and producer prices declined more than expected in December, while production at US factories fell more than expected and November output was weaker than thought.

The Dow Jones Industrial Average fell 613.89 points or 1.81% to 33,296.96 and the S&P 500 lost 62.11 points or 1.56% to 3,928.86. The Nasdaq Composite dropped 138.10 points or 1.24% to 10,957.01.

Back home, most sectoral indices closed lower on Thursday except for mining and oil, which rose by 182.17 points or 1.58% to 11,665.06, and services, which inched up by 2.99 points or 0.16% to 1,790.22.

Meanwhile, financials lost 18.95 points or 1.03% to close at 1,820.07; property decreased by 16.86 points or 0.54% to 3,097.97; industrials went down by 48.82 points or 0.48% to 9,970.51; and holding firms inched down by 3.07 points or 0.04% to end at 6,818.60.

Value turnover declined to P7.03 billion on Thursday with 1.87 billion shares changing hands from the P7.99 billion with 991.91 million issues traded on Tuesday.

Advancers outnumbered decliners, 107 versus 83, while 53 names closed unchanged.

Net foreign buying dropped to P506.66 million on Thursday from the P532.16 million seen the previous trading day.

“[Thursday’s] move also continues to indicate that the uptrend remains intact, with prospects of further gains in [Friday’s] session,” Mr. Mercado said.

He placed the PSEi’s immediate support at 6,900 and resistance at 7,200. — Justine Irish D. Tabile with Reuters