Index eases 9 pts on technical correction

Share prices ended lower yesterday as the market continued to undergo a technical correction following the strong run-up staged in recent sessions, traders said.

The 30-company Philippine Stock Exchange Index closed down 8.97 points, or 0.7 percent, at 1,356.15, after shedding 1.4 percent Tuesday. Decliners led gainers 34 to 26, while 43 issues were unchanged.

Prior to the previous session’s loss, the main index rose 6.6 percent in three straight trading days.

"It’s the kind of rally where you ask the question: Why? It was too bullish," AB Capital Securities economist Jose Vistan told Dow Jones Newswires. "So the natural reaction is there will be doubts, which leads to profit-taking."

Blue-chip telecommunications stocks Globe Telecom and Philippine Long Distance Telephone Co., or PLDT, led the market retreat, largely on profit-taking.

PLDT lost P15, or 2.1 percent, at P690, in step with the 6.6-percent loss suffered overnight by the company’s American Depositary Receipts in New York.

Globe finished down P20, or 2.6 percent, at P755.

Other active stocks included SM Prime, down P0.10, or 1.5 percent, at P6.70, and Bank of the Philippine Islands, down P0.50, or 1.1 percent, at P44.50. Manila Electric B was down P0.25, or 1.1 percent, at P21.75.

Vistan said after its much needed correction, the market should be able to resume its rise in the coming sessions.

"Tomorrow, we might see a slight recovery, as we get closer to the state visit of US President George Bush," Vistan said. "The perception, whether it’s right or wrong, is that there will be some sort of window-dressing by the end of the week."

A "modest recovery" is expected to take place today ahead of US President George W. Bush’s visit to Manila on Saturday, dealers said.

"There is a perception, whether correct or not, that window-dressing may take place ahead of the Bush visit. Given that scenario, we can expect a modest recovery for the market tomorrow," said Jose Vistan of AB Capital.

Citiseconline.com analyst Mark Alan Canizares said bargain-hunters are bound to return following the declines of the past two days.

"Recent positive developments such as the upcoming presidential visit and the killing of a top terrorist (Jemaah Islamiyah’s Fathur Rohman al-Ghozi) bode well for the Philippines," he said.

"Investor sentiment remains positive on the back of these recent developments, coupled with expectations of a better earnings outlook for select companies," Canizares said. – AP, AFP