By Arra B. Francia, Reporter
STOCKS FELL anew on Wednesday as investors remained cautious ahead of the back-to-back meetings of the United States Federal Reserve and the country’s own central bank.
The bellwether Philippine Stock Exchange index (PSEi) dropped 0.87% or 63.96 points to close at 7,268.21 yesterday, extending Tuesday’s decline. The broader all-shares index likewise slipped 0.76% or 34.43 points to finish at 4,460.47.
“The market movement today is, I think, a risk-off sentiment ahead of FOMC (Federal Open Market Committee) rate decision and of course BSP (Bangko Sentral ng Pilipinas) Monetary Board meeting,” IB Gimenez Securities, Inc. Research Head Joylin F. Telagen said via text on Wednesday.
The FOMC will have its two-day policy meeting from Sept. 26-27, with consensus pointing to a rate hike of 25 basis points (bps).
Meanwhile, the BSP’s Monetary Board will also meet on Thursday for its own review, with most projections citing as much as a 50 bps increase in benchmark interest rates. This move is expected to temper inflation in the months ahead, after it shot up to 6.4% last August, the highest in around nine years.
“With regards to the expected 50 bps rate hike [on Thursday] to curve inflation, I still believe inflation is still yet to peak in the 3rd or 4th quarter this year and might taper back to 4-5% levels early 2019, therefore the government’s GDP target of 7-8% remains under threat,” Unicapital Securities, Inc. Certified Securities Representative Cristopher Adrian T. San Pedro said in a separate message.
On a technical note, Mr. San Pedro said the market might test the next support level at 7,200 and 7,134 after encountering the 7,433 resistance.
“I believe the market still lacks macroeconomic catalysts in the short term and this is why the investors are still cautious and on the sidelines,” he said.
Property was the lone sector that managed to log gains, climbing 1.67% or 60.41 points to 3,660.22. The rest declined, led by financials, which plunged 3.6% or 59.41 points to 1,590.40. Industrials lost 1.66% or 183.78 points to 10,844.93; services shed 1.54% or 23.21 points to 1,480.87; mining and oil dipped 1.29% or 118.76 points to 9,043.50; and holding firms slumped 0.28% or 20.40 points to 7,135.03.
Some 1.05 billion issues switched hands, resulting in a turnover of P4.94 billion, higher than the previous session’s P3.50 billion. Decliners trumped advancers, 121 to 66, while 54 issues closed flat.
Net foreign outflows widened to P520.35 million versus the P160.45 million recorded on Tuesday. This marked the 20th straight day that foreign investors logged a net foreign selling position.
Meanwhile, most Asian markets rose on Wednesday as most investors also waited for the third interest rate hike by the US Fed for this year.

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