Share prices snap six-day rally on profit-taking

Share prices closed 0.30 percent lower yesterday, snapping a six-day rally, as investors locked-in profits after the key index returned to its highest level in almost 10 years, dealers said.

They said blue-chips Philippine Long Distance Telephone Co. (PLDT) and Ayala Land led decliners as market participants opted to wait for the release of corporate earnings before buying more shares.

The composite index fell 9.93 points to 3,271.97 after trading between 3,265.15 and 3,308.58 points. There were 6.2 billion shares traded worth P10 billion.

Losers outnumbered gainers 66 to 39, while 54 stocks ended unchanged.

The broader all-share index was down 2.83 points at 2,061.18.

"The market is consolidating," said Chelsea Dipasupil of RCBC Securities. "It’s a healthy correction since some stocks are already overbought after the recent run-ups."

Lawrence de Leon, an analyst at Accord Capital Equities, said that after a six-day rally, investors decided to cash in on their gains.

"The correction could continue in the next few sessions, especially as investors await more corporate results," he said.

But dealers believe the market’s uptrend remains intact, backed by hopes the economy will continue expanding this year amid low interest rates and tame inflation.

"In fact what pushed the market in earlier trade was the spate of good economic news," said Joseph Roxas of Eagle Equities.

"Our outlook is still positive, nothing has really changed fundamentally. The market has had a strong run-up since the start of the year so expect some corrections," said Wealth Securities analyst Ricardo Puig.

Housing concern Filinvest Land, which resumed trading after an 11-session suspension to make way for a recent stock offer, was the most active with a 12-percent gain at P1.82.

Metropolitan Bank & Trust Co. lost 2.4 percent at P61 on profit-taking.

PLDT closed down P5 at P2,560 while its rival Globe Telecom lost five to P1,405.

Ayala Land, which reported Monday net profit last year rose seven percent from 2005, gave up 25 centavos to settle at P17.25.

"Some people were disappointed with the performance of Ayala Land,’’ said Astro del Castillo, managing director of First Grade Holding Inc., a financial management and advisory company. "It’s a good opportunity for those who are ahead in the stock to take their profit.’’

The company said earlier its profit in 2006 rose to P3.9 billion as sales reached a record. The profit was lower than the P4.3 billion median of six analysts’ estimates compiled by Bloomberg.

"This is just a knee-jerk reaction to the company’s lower- than-expected performance,’’ Del Castillo said. — AFP, AP, Bloomberg