THE local stock market failed to sustain the positive momentum seen at the end of last week as index heavyweights fell amid lingering uncertainties, analysts said.
Most Asian markets swung lower Monday following healthy gains at the end of last week, as investors bet that the Federal Reserve will raise interest rates before the end of the year.
Shares had soared Friday after data showed the first rise in Chinese factory prices for more than four years, fuelling hopes the worlds number two economy is reaching the end of a years-long growth slowdown.
The Philippine Stock Exchange index (PSEi) lost 31.09 points or 0.42% yesterday to close at 7,358.21; while the broader all-shares index skidded 35.12 points or 0.79% to close at 4,367.57.
Last week, the market ended in positive territory after seven days of losses.
Analysts said comments from Fed boss Janet L. Yellen Friday suggested the US central bank would raise borrowing costs but at a steady pace.
Ms. Yellen said running a high-pressure economy could help it overcome the damage caused by the global financial crisis.
"The net foreign selling is mainly because of uncertainty," AB Capital Securities analyst Victor F. Felix said in a phone interview.
"Next month there is the US elections and there is also a formal OPEC meeting and then in December you have the Fed rate hike prospect."
"Today we went down during runoff period mainly because a lot of index heavyweights ended in the red," he said, referring to the nine companies whose shares have fallen yesterday by as much as 4.85%.
Bloomberry Resorts Corp. led the losses, down 4.85%, or 25 centavos, at P4.90 per share.
Mr. Felix said the market would have to wait for positive drivers in the form of favorable third quarter earnings results and third quarter gross domestic product data.
"So not much tailwind for our market but a lot of uncertainty which causes headwind. If we're able to sustain at least the 6.5% GDP rate, I think that would be a positive driver for our market."
Regina Capital Development Corp. Managing Director Luis A. Limlingan attributed the losses to profit taking in the futures market.
"I think it's because in the futures market, there are some profit taking ahead," he said in a phone interview.
Holding firms as well as mining and oil stocks improved yesterday, while the rest of the indices fell.
Mining and oil shares gained 127.38 points or 1.14% to close at 11,268.30; while, holding firms added 21.62 points or 0.29% to close at 7,417.18.
Industrials took the steepest dive yesterday, down 0.9% or 105.59 points to close at 11,514.39; property shed off 45.92 points or 1.4% to close at 3,220.86; services slid 4.75 points or 0.33% to close at 1,419.38 while financials fell 0.70 points or 0.03% to close at 1,779.47.source:bworldonline