Philippine stocks tumbled after a two day run under the new trading system of the Philippine stock exchange.  Sentiments were dampened by the weakness in the major bourses abroad and short term profit takers.  Leading the decline in the markets abroad was the US, which slipped on weak data and a downbeat outlook from the US Federal Reserves.  The US main composite index declined by 39.81 points or 0.38%.  Concerns abroad were heightened last night after US June durable goods data unexpectedly dropped.  Adding fuel to the bearish fire was the Federal Reserve's Beige Book, which indicated economic activities in some US districts have been weak.

 

The local main share index fell 22.56 points or 0.65% to 3,429.35.  The broader All shares index also lost 15.10 points or 0.69% to 2,183.68.  Today's decline was led by conglomerates SM Investment Corp. (SM), Ayala Corporation (AC) and Aboitiz Equity Ventures (AEV).  All three holding companies took away at least three points from the PSEi.  The PSEi opened mixed but steadily declined through out the trading session.  All sub indices were in the red with the biggest decline recorded in the Holdings sub index, which lost 1.74%.  Such negative breadth was evident in the win/loss ratio, which saw losers beat gainers 78 to 37 as against 46 unchanged issues.    Volume has been normalizing with turnover today at 908.34 million shares valued at P3.42 billion pesos. 

 

The market may continue to trek lower on follow through profit taking tomorrow.  Short term technical oscillators are giving a sell signal on the PSEi although the downside appears to be limited.  Weakness may come from mid cap stocks, which recently had strong run ups and are more susceptible to profit taking.  Trading range is expected to be narrow in the coming sessions.  The PSEi's immediate resistance is at the 3,470 level while support is at 3,400.  There could be some positioning at the support level as more 2nd quarter corporate earnings results will be released next week.