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PSEi slips on MSCI rebalancing, US-China talks

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By Denise A. Valdez, Reporter

THE MAIN INDEX continued to slip on Tuesday as foreign investors reacted to the latest Morgan Stanley Capital International (MSCI) rebalancing and developments in the Sino-US trade war.

The 30-member Philippine Stock Exchange index (PSEi) lost 63.82 points or 0.82% to close at 7,707.80 on Tuesday, while the broader all shares index shed 27.18 points or 0.58% to 4,626.36.

“[T]he main index ended lower on last-minute selling on heavy trading volumes as today marks the last day of the MSCI rebalancing,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Tuesday.

The MSCI Emerging Markets Index is a measure used to indicate the equity market performance of a developing economy. For the Philippines, the MSCI rebalancing took effect at the close of trading on Tuesday.

“The massive volumes today came in right before the close as foreign investors repositioned themselves in accord to the MSCI Philippine index. Investors may begin to pick up heavily battered companies as foreign selling may be coming to an end,” Mr. Mangun added.




Regina Capital Development Corp. Head of Sales Luis A. Limlingan also identified the same reason for the local market’s movement on Tuesday, saying in a mobile message: “Philippine shares traded flat after the latest MSCI rebalancing and amid increasing expectations that China and the US will reach a so-called phase one trade deal.”

Several foreign news outlets reported Tuesday that China and the US discussed over phone their core concerns on the trade deal, where a consensus was reached on what they will do next.

Wall Street ended on a positive note on Monday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices all scaled up 0.68%, 0.75% and 1.32%, respectively. Mr. Mangun attributed this to China’s announcement of plans to impose higher penalties in protecting intellectual property rights.

Back home, two sectoral indices climbed at Tuesday’s close: mining and oil by 210.59 points or 2.56% to 8,437.26 and services by 6.61 points or 0.42% to 1,548.04.

Meanwhile, property lost 50.38 points or 1.26% to end at 3,946.60; financials went down 17.64 points or 0.94% to 1,843.39; holding firms gave up 62.2 points or 0.8% to 7,688.23; and industrials dropped 46.93 points or 0.48% to 9,700.73.

Value turnover jumped to P21.16 billion yesterday from Monday’s P4.68 billion, with 1.51 billion issues changing hands.

Declining stocks continued to outnumber advancing stocks, 99 against 72, while 55 names ended unchanged. Net foreign outflows ballooned to P4.80 billion on Tuesday from Monday’s P1.08 billion, also marking the sixth straight day of net selling by offshore investors.

“The PSEi’s failure to hold the 7,750 support level confirms that it wants to go lower and perhaps test the major support level at 7,500,” AAA Southeast Equities’ Mr. Mangun said.









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