By Arra B. Francia, Senior Reporter

SHARES CONTINUED to drop on Tuesday, following the negativity in Wall Street as investors waited for further clues from the US Federal Reserve on their decision on interest rates.

The benchmark Philippine Stock Exchange index (PSEi) slipped 0.11% or 9.48 points to close at 8,042.04 yesterday, extending the previous session’s losses. The broader all-shares index likewise shed 0.25% or 12.73 points to 4,900.74.

“The index weakened again today, largely following moves of the Dow and S&P 500 last night, as the market could still be on a wait and see mode on Fed Chair Powell’s comments to Congress in the coming days — looking for any indications on the Fed’s move later this month,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail on Tuesday.

Fed Chairman Jerome Powell will appear before the US Congress for his semiannual testimony on July 10-11, which should give investors an opportunity to gauge near-term monetary policy direction. Investors previously anticipated more rate cuts to counter the supposed economic slowdown from the US’ trade war with China.

The Fed is also scheduled to release the minutes of its June meeting on Wednesday.

With lower expectations of an interest rate cut, the Dow Jones Industrial Average went down 0.43% or 115.98 points to 26,806.14. The S&P 500 index declined 0.48% or 14.46 points to 2,975.95, while the Nasdaq Composite index retreated 0.78% or 63.41 points to 8,098.38.

Asian markets were mixed, with Japan’s Nikkei 225 up by 0.14% or 30.80 points to 21,565.15. The Shanghai Composite was down 0.18% or 5.13 points to 2,928.23, while the Hang Seng index fell 0.76% or 215.41 points to 28,116.28.

“Lack of catalysts amid tempered rate cut hopes from the Federal Reserve pulled the local market… Asian markets were mixed while US and European indices were pointing downwards ahead of the Fed Chairman Jerome Powell’s speech,” Philstocks Financial, Inc. said in a market note.

Locally, four sectoral indices closed in negative territory, led by services which plunged 1.68% or 28.17 points to 1,647.83. Holding firms lost 0.32% or 24.87 points to 7,699.22; property dropped 0.14% or 6.12 points to 4,345.68, while industrials declined 0.05% or 6.74 points to 11,966.43.

In contrast, mining and oil climbed 0.46% or 34.51 points to 7,503.10, while financials rose 0.3% or 5.33 points to 1,733.42.

Turnover improved to P5.89 billion after some 1.57 billion issues switched hands, compared to the previous session’s P5.63 billion.

Decliners were almost double the advancers, 125 to 71, while 44 names were unchanged.

Foreign investors turned net buyers at P735.12 million, snapping a three-day selling streak that ended with P319.03 million in net outflows on Monday.

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