Stocks drop as investors take profits from rally

PHILIPPINE STOCKS dropped on Tuesday as investors locked in their gains from Monday’s rally, even as sustained optimism following news of an interim deal between the United States and Iran pushed the main benchmark above the 6,300 line intraday.

The Philippine Stock Exchange index (PSEi) went down by 0.43% or 27.13 points to close at 6,245.75, while the broader all shares index fell by 0.27% or 9.32 points to end at 3,425.03.

The main stock benchmark opened Tuesday’s session at 6,386.65, rising from Monday’s over three-month high close of 6,272.88. It surged to a peak of 6,396.23 before succumbing to selling pressure and finishing the session at its intraday low.

“The PSEi closed this Tuesday at 6,245.75, down by 0.43% due to last minute profit taking. Investors booked gains from the local market’s recent rally, which got extended to 6,396.23 intraday. On a positive note, the market held its position above the 6,150 support level,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The Philippine market opted for profit taking on Tuesday despite lingering optimism over the reported peace agreement between the US and Iran, with investors hoping for more stable oil prices and easing inflationary pressures. However, selling pressure intensified during the afternoon session as investors locked in gains from the recent rally. As a result, the index ended the session in negative territory,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

US President Donald J. Trump said on Monday a preliminary agreement to end the conflict had been signed by the US and Iran, although details have yet to be made public and both countries said a permanent truce was yet to be negotiated, Reuters reported.

The interim agreement would extend a tenuous ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which Iran has effectively blocked since the US and Israel attacked Iran in February. Negotiators would address difficult issues like the future of Iran’s nuclear program during the next phase of talks to be held during the 60-day window.

Sectoral indices closed mixed on Tuesday. Mining and oil rose by 2.66% or 448.86 points to 17,277.67; services increased by 0.47% or 15.87 points to 3,361.51; and industrials went up by 0.3% or 25.49 points to 8,508.26.

Meanwhile, financials declined by 1.58% or 30.70 points to 1,909.34; holding firms dropped by 0.75% or 33.79 points to 4,442.37; and property went down by 0.56% or 10.61 points to 1,856.37.

Decliners outnumbered advancers, 92 to 84, while 64 names were unchanged.

Value turnover went down to P11.80 billion on Tuesday with 862.02 million shares traded from the P12.76 billion with 679.84 million issues that changed hands on Monday.

Net foreign buying decreased to P939.97 million from P1.03 billion in the previous session. — Alexandria Grace C. Magno