Shares drop on profit taking ahead of US data

December 10, 2021

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Philippine Stock Exchange index

STOCKS declined on Friday on profit taking ahead of the release of the US consumer price index report.

The benchmark Philippine Stock Exchange index (PSEi) fell 42.75 points or 0.59% to close at 7,192.17 on Friday, while the broader all shares index slid by 12.12 points or 0.31% to 3,830.43.

“Local shares were sold as investors took in some of their profits ahead of the CPI data release this Friday in the US. Economists, as surveyed by Dow Jones, expect the Nov inflation to hit 6.7% year on year–the hottest since June 1982,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The US CPI for November was due later on Friday and a Reuters poll of economists expect it to have risen 6.8% year-on-year, overtaking a 6.2% increase in October, which was the fastest gain in 31 years.

Any upside surprise will likely be interpreted as a case for a faster Federal Reserve taper and bring forward expectations for interest rate rises.

“After PSEi gained for five straight days, the decline today is considered healthy,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message on Friday.

All sectoral indices closed in the red on Friday. Financials fell 21.76 points or 1.35% to 1,590.47; property lost 31.54 points or 0.96% to 3,233.90; industrials dropped 35.63 points or 0.34% to 10,397.95; mining and oil decreased 16.76 points or 0.18% to 9,196.45; holding firms gave up 9.54 points or 0.13% to 6,968.68; and services went down 1.01 points or 0.05% to 1,993.97.

Value turnover increased to 15.52 billion with 3.57 billion issues switching hands on Friday from the P8.61 billion with 1.87 billion shares traded on Thursday.

Decliners beat advancers, 103 against 99, while 43 names closed unchanged.

Net foreign selling jumped to P9.57 billion from the P1.09 billion seen the previous trading day.

Mr. Ricafort said the PSEi’s immediate support is at the 7,000-7,040 levels, while immediate resistance will be at 7,230-7,260.

“Support may be drawn at the 6,800 area, while 7,454.50 may be considered the resistance area to watch next week,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message. — M.C. Lucenio with Reuters