Stocks close sharply lower on profit-taking

Share prices closed 3.35 percent lower yesterday as investors took profits on recent gains amid growing concerns the US central bank will hike interests rate again next week, dealers said.

They said the latest US data had sparked fresh inflation worries on Wall Street overnight which had set the tone for a negative day here.

Traders also pointed out that investors cashed in on gains made in recent sessions amid renewed concerns over the adverse impact of rising oil prices.

The composite index ended down 79.96 points at 2,308.37, its lowest level in a week. It traded between 2,297.91 and 2,388.33 points.

The broader all-shares index fell 39.68 points to 1,429.01.

Losers swamped gainers 84 to 8, with 32 stocks unchanged, while volume was 1.8 billion shares worth P1.35 billion.

"Wall Street’s decline is one of the reasons and a big part of yesterday’s fall was also because investors decided to lock in gains," said Oliver Plana of Asiasec Equities.

"The Philippine market has outperformed its peers in the past couple of days," he added.

"The market’s decline was just due to a correction. It was already signaled during Monday’s trading, when the market opened higher then declined at the close," said BPI Securities assistant vice president Spencer Yap. "The degree of decline yesterday is just a result of the steep rise of most issues during the past two weeks."

Rising oil prices also may have given investors an excuse to cash in on gains, said Yap.

Local stocks hit an 11-week high on Monday as investors found inspiration from mostly upbeat corporate results.

President Arroyo’s annual speech to the nation last week where she unveiled the government’s plans to spend heavily on infrastructure to spur economic growth had also helped sentiment.

Online broker 2TradeAsia.com said renewed concerns about US interest rates in the US and volatile oil prices due to ongoing tension in the Middle East had capped the market’s optimism.

US stocks fell overnight after data showed inflation remained high and the manufacturing sector was robust, suggesting a strong economy would give the Fed more room to raise rates further without stifling growth.

Philippine Long Distance Telephone Co. (PLDT) was the most actively traded stock, shedding 4.1 percent to close at P2,005 on profit-taking after gaining 11 percent during the past seven sessions.

Globe Telecom shed P30 to P980 on profit-taking after the country’s second largest telecoms firm reported a 37-percent year-on-year rise in first-half net profit and announced a cash dividend.

Property firm Ayala Land fell 75 centavos to P13 while parent Ayala Corp. shed P20 to P412.50. — AFP, AP