By Arra B. Francia, Senior Reporter

LOCAL SHARES slumped on Tuesday as investors waited for new catalysts, especially the results of the US Federal Reserve’s policy meeting.

The bellwether Philippine Stock Exchange index (PSEi) retreated 0.46% or 38.06 points to close at 8,150.46. The broader all-shares index also dropped 0.54% or 26.96 points to 4,936.08.

“The story remains for the index with dull trading dominating the entire day as the PSEi waits on the sidelines for the results of the upcoming Fed meeting,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail.

The Federal Open Market Committee will announce the results of its two-day policy meeting on July 31. A 25-basis-point cut has mostly been factored in and investors now await the conclusion of the meeting on Wednesday to gauge the direction the Fed will take in the near term.

“With the index’s close below its 20-day MA (moving average) support for the first time since May 28, PSEi technicals are now starting to look shaky. No major conclusions should be made in the meantime however, at least until we get more clarity from the near-term catalyst which is the Fed,” Mr. Perez said.

Meanwhile, AAA Southeast Equities, Inc. Research Head Christopher John Mangun attributed the decline to profit taking.

“Most Asian equities markets were up slightly today but here at the PSE, the main index ends lower on profit taking. It would have closed lower if not for the foreign buying that we saw today,” Mr. Mangun said in a separate e-mail on Tuesday.

Foreign investors switched to net buying mode on Tuesday with P631.12 million, against the previous session’s P180.74-million net outflow.

Four sectoral indices slipped to negative territory. Holding firms plunged 0.87% or 69.68 points to 7,939; property lost 0.71% or 31.06 points to 4,334.79; mining and oil dropped 0.46% or 37.11 points to 7,883.30; while industrials went down 0.43% or 49.59 points to 11,399.62. Meanwhile, services climbed 0.57% or 9.43 points to 1,644.82. Financials also added 0.28% or 5.26 points to 1,854.11.

Some 754.80 million issues valued at P6.87 billion switched hands, higher than the P4.84-billion turnover on Monday.

Decliners outpaced advancers, 115 to 85, while 49 names were unchanged.

Other Southeast Asian markets traded in a tight range ahead of the Fed policy meeting starting later in the day.

Market participants also kept a tab on the fresh round of dialogue between top officials from the United States and China in Shanghai to deescalate the tariff dispute.

Overnight, Wall Street indices were mixed. The Dow Jones Industrial Average was up 0.11% or 28.90 points to 27,221.35, while the S&P 500 index tumbled 0.16% or 4.89 points to 3,020.97. The Nasdaq Composite index also dropped 0.44% or 36.88 points to 8,293.33. — with Reuters

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