Index falls on Dow losses, lack of new leads

Share prices closed 0.80 percent lower yesterday as investors locked in profits following a pullback on Wall Street overnight, dealers said.

They said investors decided to stay on the sidelines while the ongoing stock offerings of several companies continued to suck liquidity out of the market.

And they are likely to remain reluctant to trade aggressively until after President Arroyo’s annual address to Congress next Monday, they added.

The composite index finished down 31.89 points at 3,702.91 after trading between 3,696.42 and 3,734.80 points.

The all-share index fell 18.13 points to 2,396.57.

There were 103 decliners and 22 advancers, while 48 stocks were unchanged.

Volume amounted to 4.2 billion shares worth P4.6 billion.

“The market is still in correction mode after last week’s rally. There are no new leads to push prices higher so investors are again testing if the 3,700 support level will hold,” said Rommel Macapagal of Westlink Global Equities.

Investors sold shares following Wall Street’s retreat on Wednesday plus news that the Philippine government incurred a bigger-than-targeted budget deficit of P41 billion for the first half of the year, analysts said.

But Summit Securities president Harry Liu said although the market has yet to slide sharply after recent gains, “the long-term bullish trend and the target of 4,000 points for the main index for this year remain intact.”

Traders said the initial public offerings have triggered a liquidity drain, with the focus shifting from blue chips to cheaper third-tier stocks that are expected to provide quick gains.

The first-half budget deficit, reported Wednesday, and higher oil prices also provided a cue for the market, said Regina Capital Development analyst Gomer Tan.

Metropolitan Bank and Trust Co., the Philippines’ largest lender by assets, fell P3 to P67.

Philippine Long Distance Telephone Co. (PLDT), the country’s biggest company by market value, retreated P5 to P2,700.

ABS-CBN Broadcasting Corp. dropped 50 centavos to P37.

San Miguel Corp. saw its A and B shares remain unchanged at P74 and P82.50 respectively.

Conglomerate Ayala Corp. dropped 1.8 percent to P555. — AFP, AP