Philippine stocks tumble on profit-taking

The Philippine stock market ended the trading session on Friday and closed the week in the negative on profit taking.
The bellwether Philippine Stock Exchange index lost 0.002 percent or 0.18 of a point to 7,201.88, while the broader all- share index managed to eke out a gain of 0.07 percent, or 2.99 points, to 4,259.69.
Trading volume reached 1.68 billion shares worth 7.16 billion pesos (163.12 million U.S. dollars) with 86 stocks advancing, 82 declining, and 51 were unchanged.
Three of the six counters bucked the trend.
"The Philippine Stock Exchange Index succumbed to profit taking this week recording its four losses out of five trading sessions," Alexander Adrian O. Tiu of AB Capital Securities, Inc. said.
Tiu said the interest rate hike by the Philippine central bank is seen as bearish to equities in general, negatively affecting stock market liquidity and attractiveness.
"A tighter monetary policy discourages consumer spending, driving sales lower which affects a company's top-line. It also affects a company's earnings through higher interest expense," he said.
The index ended the week with a 61.7 decline and Tiu said there might be a pullback in the succeeding weeks as the effect of higher lending rates are priced in.
On a technical basis, the major support level at 7,200 managed to hold through for the past three consecutive trading sessions, Tiu added.
He said a breach below the support next week opens the index to further downsides at 7,000 while a strong rebound from current levels suggests a re-testing to the previous high of 7,330.
Stocks in the 30-company index closed mixed. While investors picked up shares of heavyweight Philippine Long Distance Telephone Co., the Bank of the Philippine Islands and Jollibee Foods Corp., they sold down Alliance Global Group, Inc., Megaworld Corp. and Ayala Land, Inc