PSEi closes lower on profit taking, rate hike bets
STOCKS slid on Tuesday as investors pocketed gains from the market’s five-day rally and amid bets of bigger rate hikes from the US central bank as inflation risks grow due to the continuing Russia-Ukraine war.
The benchmark Philippine Stock Exchange index (PSEi) dropped by 19.27 points or 0.27% to close at 7,115.09 on Tuesday, while the broader all shares fell by 11.52 points or 0.30% to 3,770.53.
“The bourse pulled back as investors booked gains out of its preceding five-day rally. This, as many investors stayed out of the market due to lingering risks, primarily on inflation, and lack of a strong catalyst,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“Philippine shares closed just slightly down as investors entered a busy week rife with key economic data that could position the Federal Reserve to act more aggressively on plans to raise interest rates. Aside from keeping up to date with the Ukraine war developments, investors anticipate the release of consumer confidence and home price data on Tuesday, ahead of Friday’s monthly jobs report,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
The US central bank must move “expeditiously” to bring too-high inflation to heel, US Federal Reserve Chair Jerome H. Powell said last week, adding that it could use bigger-than-usual interest rate hikes if needed to do so, Reuters reported.
The US consumer price index was at 7.9% year on year in February, the fastest in four decades. Inflation risks have been growing due to the ongoing war between Russia and Ukraine, which has caused prices of oil and other commodities to spike.
Australia, Britain, Canada and the United States have imposed outright bans on Russian oil purchases following Moscow’s invasion of Ukraine, but the European Union remains divided.
Back home, most sectoral indices closed lower. Mining and oil declined by 509.18 points or 3.98% to 12,260.05; holding firms lost 48.24 points or 0.70% to 6,768.12; services dropped by 9.37 points or 0.48% to 1,913.72; and property went down by 7.16 points or 0.21% to 3,321.60.
Meanwhile, industrials added 44.29 points or 0.45% to 9,692.64 and financials gained 4.43 points or 0.26% to end at 1,677.78.
As for the PSE’s thematic indices, the MidCap index improved by 0.39 point or 0.03% to close at 1,195.49, while the Dividend Yield index retreated by 19.54 points or 1.14% to 1,688.46.
Value turnover decreased to P4.87 billion with 788.02 million shares changing hands from the P5.19 billion or 768.14 million issues seen on Monday.
Decliners outnumbered advancers, 92 versus 82, while 57 names closed unchanged.
Foreigners turned sellers with P214.40 million in net outflows from the P185.89 million in net purchases seen the previous trading day. — LMJCJ with Reuters
