PSE index drops ahead of BSP’s announcement

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PSE BGC bell

By Denise A. Valdez, Reporter

LOCAL SHARES traded lower on Thursday in anticipation of the last policy meeting of the Bangko Sentral ng Pilipinas (BSP), which concluded after the market closed.

The benchmark Philippine Stock Exchange index (PSEi) lost 45.34 points or 0.58% to close at 7,741.07 on Thursday, while the broader all shares index shed 24.91 points or 0.53% to 4,598.75.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the dismal trading yesterday came ahead of the BSP’s last policy meeting of the year.

He also said the quiet trading happened “after the (US) Fed hinted that it will not raise interest rates next year, allaying investors’ fears that a premature policy tightening will occur again next year.”

After its two-day policy meeting this week, the US Federal Reserve decided to maintain interest rates as it expects economic activity, labor market conditions and inflation to be stable.

Wall Street took the news positively: the Dow Jones Industrial Average index, the S&P 500 index and the Nasdaq Composite index all went up 0.11%, 0.29% and 0.44% on Wednesday, respectively.

At the local bourse, more sub-sectors declined on Thursday: property by 74.76 points or 1.80% to 4,077.69; mining and oil by 53.19 points or 0.71% to 7,418.48; holding firms by 42.90 points or 0.56% to 7,545.13; and services by 4.45 points or 0.29% to 1,497.50.

On the other hand, industrials gained 29.43 points or 0.30% to end at 9,589.92 and financials rose 2.64 points or 0.14% to 1,888.52.

Timson Securities, Inc. Trader Darren T. Pangan said the movement of the main index was dragged by heavyweights SM Prime Holdings, Inc. (-3.22%), SM Investments Corp. (-0.84%) and Metro Pacific Investments Corp. (-15.67%).

“(SM Prime) may have succumbed to investors profit-taking as it reached resistance levels at 42, while SM may have closed lower as investors did some last minute selling. Lastly, (Metro Pacific) lost by 15.67% as a continuation of the sell-off due to the revoked concession agreements with Maynilad, its subsidiary,” he said in a text message.

Some 591.09 million issues valued at P6.26 billion switch hands on Thursday, down from 666.15 million issues worth P5.29 billion on Wednesday.

Declining stocks outnumbered those that advanced, 113 against 76, while 50 names ended unchanged.

Net foreign selling was reduced to P387.41 million on Thursday from P471.74 million on Wednesday.

“The PSEi is set to end the week with losses unless we see a miracle tomorrow. Foreign investors continue to take risk off the table as prices keep sliding lower. Investors may have already given up on a ‘santa claus’ rally,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Thursday.