Market ends 2-day rally on weak Dow, rising oil prices

Share prices closed 0.61 percent lower yesterday, ending a two-day rally after further losses on Wall Street and a fresh spike in oil prices hit sentiment, dealers said.

They said the return to higher oil prices after the latest US oil stockpiles data was unwelcome given the possible impact on inflation and the risk the central bank could hike interest rates as a result.

The composite index fell 11.65 points to 1,903.09, off a high of 1,918.81. Turnover was 612 million shares worth $803.7 million.

The broader all-shares index retreated 5.79 points to 1,164.24.

Losers beat gainers 35 to 17, with 49 stocks unchanged.

"This is a correction after the technical rebound," said Jose Vistan of AB Capital Securities.

He said the market failed to sustain the gains of the past two days in the absence of fresh positive leads and after oil prices resumed their uptrend, prompting fresh concerns about the impact on the economy.

"Give me one good reason why the market should rise and I’ll give you 10 reasons why it shouldn’t," Vistan said.

Dealers said an expected tightening in monetary policy also dampened sentiment.

"Investors have turned short-term, given lingering concerns on oil. Politics also remains a disincentive to trade," said Ron Rodrigo of Accord Capital Equities, referring to efforts to oust President Arroyo.

Philippine Long Distance Telephone Co. (PLDT) was the most active stock, falling P20 to P1,540.

SM Prime Holdings declined 10 centavos to P7.10 while parent SM Investments was unchanged at P212.

Manila Electric (Meralco) B, available to all investors, was down P1 to P20.50. Meralco A, limited to local buyers, was unchanged at P13.75.

Ayala Corp. eased P2.50 to P295 while unit Ayala Land was flat at P7.70.

San Miguel B, open to all investors, was unchanged at P95, as was San Miguel A, limited to Filipino investors, at P65.50.

Westlink Global Equities Chairman Rommel Macapagal said the decline indicates the recent market advance wasn’t convincing and investors remain reluctant to stay in the marke for a longer period.

Political concerns over opposition moves to oust President Arroyo following the defeat of their impeachment case were also a factor behind Thursday’s fall, traders said.

Investors are also keeping an eye on the impact of the implementation of the expanded value added tax law, the centerpiece of the government’s fiscal reform program, after the Supreme Court upheld its legality. The court hasn’t lifted the suspension it imposed on the measure in July to give the opposition a chance to challenge the ruling. - AP