SHARES slid on Thursday following Wall Street’s decline overnight and the Bangko Sentral ng Pilipinas’ (BSP) announcement of a 25-basis-point (bp) increase in borrowing costs at its policy review.

The benchmark Philippine Stock Exchange index (PSEi) fell by 67.55 points or 1% to close at 6,660.05 on Thursday, while the broader all shares index went down by 22.28 points or 0.62% to 3,567.78.

Analysts said the PSEi closed lower after the BSP’s policy decision, which was announced just minutes before the market’s close.

“Philippine shares alongside with the US slipped once again, as the major regional indices posted their biggest drop since 2020. The move came after big-box retail earnings indicated inflation was weighing on earnings,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The PSEi recouped some of its earlier losses… not as bad as the bigger declines in the US and other Asian/global stock markets. Market sentiment also supported by the +0.25 policy rate hike that could indicate relatively stronger economic fundamentals to withstand any local policy rate hike/s, going forward,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Mr. Ricafort said more BSP rate hikes are possible in the coming months due to expectations of aggressive increases from the Fed as US inflation continues to soar.

Wall Street ended sharply lower on Wednesday, with Target losing around a quarter of its stock market value and highlighting worries about the US economy after the retailer became the latest victim of surging prices, Reuters reported.

It was the worst one-day loss for the S&P 500 and Dow Jones Industrial Average since June 2020.

Meanwhile, the BSP Monetary Board fired off its first 25-bp rate hike in over three years on Thursday to help temper second round effects of rising prices and inflation expectations while making sure economic recovery remains on track.

The central bank had cut borrowing costs by a total of 200 bps in 2020 to help the economy weather the impact of the coronavirus pandemic.

Sectoral indices were split on Thursday. Holding firms declined by 115.12 points or 1.83% to 6,146.34; property gave up by 46.38 points or 1.54% to end at 2,962.43; and services dropped by 22.80 points or 1.19% to 1,884.86.

Meanwhile, mining and oil climbed by 157.65 points or 1.40% to 11,359.18; financials rose by 8.50 points or 0.53% to 1,613.37; and industrials gained 18.92 points or 0.20% to close at 9,307.53.

Value turnover increased to P8.01 billion on Thursday with 1.69 billion shares switching hands from the P7.75 billion with 1.6 billion issues recorded the previous trading day.

Decliners outnumbered advancers, 105 versus 79, while 36 names closed unchanged.

Foreigners turned sellers anew with P315.02 million in net sales versus the P270.89 million in net buying seen on Wednesday. — L.M.J.C. Jocson with Reuters