PSEi dips as US Treasury yield hits 16-year peak

PHILIPPINE STOCKS fell on Tuesday after the US Treasury yield reached its 16-year peak and China lowered its key lending rates.

The Philippine Stock Exchange index (PSEi) fell by 1.23% or 77.88 points to close at 6,212.39, while the broader all-share index declined by 0.9% or 30.46 points to 3,352.95.

Financial markets were closed on Monday for a national holiday.

“Philippine shares fell as the yield on the 10-year Treasury reached its highest level since November 2007,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The US 10-year Treasury yield rose to its 16-year peak of 4.366%, but later dropped to 4.334%, Reuters reported.

In July, the US Federal Reserve raised borrowing costs by 25 basis points (bps), bringing the Fed target fund rate to 5.25-5.5%. It will next meet on Sept. 19-20 to discuss policy.

“Simultaneously, investors expressed dissatisfaction with China’s decision to reduce its key lending rates lower than anticipated,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message. “It’s worth noting that China, a significant trading partner for the Philippines, has encountered economic challenges over the past few quarters.”

On Monday, China slashed its one-year loan prime rate by 10 bps to 3.45% amid efforts to raise credit demand.

Almost all sector indices dropped at the local bourse except for financials, which gained 0.45% or 8.43 points to 1,870.47.

Holding firms slipped by 2.15% or 128.49 points to 5,832.66; services decreased by 1.96% or 30.36 points to 1,517.44; industrials fell by 1.48% or 130.79 points to 8,665.01; mining and oil fell by 0.9% or 89.05 points to 9,809.64; and property dipped by 0.6% or 15.99 points to 2,608.92.

Value turnover rose to P4.79 billion, with 391.66 million shares changing hands from 348.61 million shares worth P4.48 billion on Friday.

Decliners outnumbered advancers 122 versus 60, while 40 stocks were unchanged. Net foreign selling hit P264.81 million.

Markets were “relatively quiet” on Tuesday after the Monday break as investors await the release of the budget balance for July on Aug. 25, Mr. Limlingan said.   

Mr. Vistan placed the PSEi’s support at 6,100 points. — Sheldeen Joy Talavera