Share price’s dropped yesterday after reaching record highs earlier this week, with investors taking profits across the board.
The benchmark 30-company Philippine Stock Exchange Index fell 29.01 points, or 0.8 percent, at 3,441.76, after gaining 0.1 percent Thursday. On Tuesday, it rose to a record 3,505.03.
“The market is slightly overbought, and we may see further correction in the short term,” said Summit Securities president Harry Liu.
Conglomerate Ayala Corp. fell 2.9 percent to P505, Bank of the Philippine Islands shed 2.1 percent to P68.50, and property developer Megaworld Corp. was down 3.8 percent at P3.85 on profit-taking after recent sharp gains.
Decliners outnumbered gainers 68 to 44, while 52 stocks were unchanged.
“There is concern US rates may rise,” said Fitzgerald Aclan, who helps manage $2 billion of assets at Banco de Oro. “That’s the main kicker” driving yesterday’s stock declines.
US home sales surged 16 percent in April, the most since 1993 and durable-goods orders gained 0.6 percent, faster than previously estimated. The yield on 10-year US Treasury notes headed for a third weekly gain as the reports undermined expectations the Federal Reserve will cut its key interest rate, currently at a six-year high of 5.25 percent, in 2007.
Lower rates may reduce returns on US Treasuries, prompting investors to favor riskier assets such as emerging-market shares.
“If interest rates in the US go up, then that would have a negative impact on emerging markets as a whole,’’ Aclan said.
“That makes Philippine stocks less attractive.”
Ayala Land Inc., lost 25 centavos, or 1.6 percent, to P15.25.
Megaworld Corp., a builder of residences and office towers declined 15 centavos, or 3.8 percent, to P3.85.
Bank of the Philippine Islands, lost P1.50, or 2.1 percent, to P68.50.
Metropolitan Bank & Trust Co., the largest lender by assets, dropped five centavos, or 0.8 percent, to P66.50. — AP