PROFIT-TAKING on Wednesday snapped the market’s two-day rally on Wednesday as investors opted to remain liquid ahead of the long weekend, although the benchmark index managed to defend the 6,900 level at the close.
Meanwhile, the peso held firm against the US dollar for the third day in a row.
The benchmark Philippine Stock Exchange index (PSEi) dropped 44.14 points, or 0.64 percent, to close at 6,900.62.
The broader All Shares index lost 0.13 percent, or 4.71 points, to 3,724.38.
Among sectoral indices, industrials were the sole gainer, up 0.14 percent, while properties lost the most, down 1.53 percent.
Decliners edged out advancers, 130 against 78, while 49 stocks were unchanged.
Analysts attributed the decline largely to profit-taking and Wall Street’s fall overnight ahead of the Jackson Hole Economic Symposium scheduled for Thursday in the United States.
Japhet Tantiangco, senior research analyst at Philstocks Financial Inc., said the decline was “due to profit-taking after the broader PSE index hit 7,000 intraday on Tuesday.”
“The local bourse also took cues from Wall Street’s decline, where investors took a cautious stance while waiting for the Jackson Hole Economic Symposium, where the Fed (US Federal Reserve) may give [some] clues on their policy outlook,” he added.
Representatives from central banks around the world are set to meet in Jackson Hole, Wyoming, for their annual Economic Symposium on Thursday, with US Federal Reserve chairman Jerome Powell set to deliver remarks on Friday.
Luis Limlingan, managing director of Regina Capital Development Corp., said Philippine shares succumbed to profit-taking after hitting 7,000 intraday on Tuesday as investors “started to keep to cash ahead of the long weekend.”
“In addition, US stocks dipped on Tuesday, ending a winning streak, as investors hesitated to extend the market’s recovery rally,” Limlingan added.
“With the Fed’s next policy meeting in focus, the CME FedWatch Tool suggests a likely interest rate cut, though the extent remains debated,” he continued.
The FedWatch Tool, created by the CME Group — said to be the world’s leading derivatives marketplace and made up of four exchanges — provides the probabilities for Fed rate changes based on prices for federal funds futures.
This week’s trading has been cut to just four days, with Friday having been declared by Malacañang Palace as a special non-working day in lieu of the August 21 commemoration of Ninoy Aquino Day.
Peso holds firm at P56 level
Meanwhile, the Philippine peso on Wednesday held firm against the greenback for three consecutive days.
The local currency strengthened by 5 centavos to P56.50 per dollar from the previous P56.55, data from the Bankers Association of the Philippines (BAP) showed.
This is the peso’s strongest close since last April 11, when it ended at the same level of P56.50 per dollar.
It opened trading at P56.40 to the dollar and ranged from P56.345 to P56.54. Volume reached P1.588 billion, up from the P1.548 billion recorded in the previous session.
Rizal Commercial Banking Corp. chief economist Michael Ricafort noted that the peso continued its momentum amid the US dollar’s sustained weakening against major global currencies, with the greenback said to have reached new 7.5-month lows.
“The peso also strengthened after the recent decline in global crude oil prices to new two-week lows,” he added.
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