Volatilities in overseas stocks catch up with Philippine market

16:58, July 20, 2010      

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The volatilities in the overseas stock markets caught up with the Philippine stock market which fell for the fourth time on Tuesday.

The benchmark Philippine Stock Exchange index lost 0.54 percent or 18.60 points to 3,405.69, while the broader all-share index slipped by 0.25 percent or 5.42 points to 2,162.37.

A total of 1.17 billion shares worth 3.16 billion pesos (68.03 million U.S. dollars) were changed hands. Foreign investors resumed their buying posting a net foreign buying transaction of 5.04 million pesos (108,000 U.S. dollars).

Decliners beat advancers 59 to 51 while 57 stocks did not move. Only the financial and the property sectors bucked the trend, while holding firms shed the most.

"After reaching fresh two year highs (last week), Philippine stocks have turned lower for the fourth consecutive session. Share prices were down on profit taking and worries of volatility in the major bourses abroad," local brokerage AB Capital Securities, Inc. said.

It noted that the U.S. stocks have again claimed the spotlight as "soft" U.S. housing data offset the optimism brought about by the strong U.S. corporate earnings results. The Dow Jones industrial average index has again closed flat, though at the positive, on Monday.

"Strong domestic fundamentals have failed to sustain the market's recent rally as investors are being driven more by the prevailing negative sentiments emanating from abroad," AB Capital Securities said.

But it was not an entirely pessimistic day for the Philippine market which opened in the positive and even retrieved the 7.02 points it lost on Monday until profit takers started setting in.

"In the coming sessions, the market is expected to continue drifting sideways with a downward bias. The local bourse is currently overbought and (technical indicators) are giving short term sell signals," AB Capital Securities said.

With very little drivers locally, the brokerage house said it expects investors to look at news abroad for guidance and any downside bias would be capped by bargain hunters, who are positioning ahead of the release of second quarter corporate earnings results.

Stocks in the 30-company index closed mixed. Heavyweight Philippine Long Distance Telephone Co. (PLDT) and property developer Ayala Land, Inc. lost 0.81 percent and 1.72 percent respectively.

Andrew Tan-led Megaworld Corp., meanwhile, managed to close higher.



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