(UPDATE) Stocks close lower on profit-taking

MANILA, Philippines (Xinhua) - The stock market erased the gains it made the previous day on profit taking but analysts are optimistic that the market is on its upward trek.

The bellwether Philippine Stock Exchange index dived by 1.24 percent or 90.84 points to 7,222.01, while the broader all-share index shed 0.98 percent or its value or 42.04 points to 4,244.30.

Trading volume reached 9.95 billion shares worth P8.51 billion ($189.40 million) with 138 stocks declining, 58 advancing and 42 were unchanged.

All six counters were down.

"Over the next couple of weeks, it will be earnings, earnings and earnings that investors will be focusing on," analyst Justino Calaycay of Accord Capital Equities Corp. said in his daily stock market comment.

The analyst said even as valuations remain elevated, investors might temporarily set this aside as the market cheer the sustained momentum in corporate earnings.

Tuesday's profit taking is merely a hiatus as most investors seem keen on pouring more money in the local equities.

"The trading view narrows to the short-term and this positive spin on stocks, which is evident since last week, should remain the driving force in the next couple of weeks," he said.

"For now, large-caps are likely to be favored, specifically from conservative fund managers who have allotted higher share of equities in their portfolio basket," 2TradeAsia.com said separately.

The online brokerage advises investors to position on dips and opts for modest returns.

Stocks in the 30-company index closed mixed. Among those that tumbled were heavyweight Philippine Long Distance Telephone Co., the Bank of the Philippine Islands, and Metropolitan Bank and Trust Co.