PSEi plunges to 6,500 level before policy meetings
THE MAIN INDEX on Tuesday ended at the 6,500 level for the first time since August as the market succumbed to selling pressure before the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).
The Philippine Stock Exchange index (PSEi) fell by 1.71% or 113.45 points to close at 6,501.71 on Tuesday, while the broader all shares index declined by 1.12% or 42.30 points to end at 3,710.21.
This was the PSEi’s lowest close in over four months or since it finished at 6,433.24 on Aug. 6.
“The PSEi fell amidst strong selling pressure as foreigners sold nearly net P1.4 billion worth of shares and investors hedged risks ahead of the monetary policy meetings of the Federal Reserve and Bangko Sentral ng Pilipinas this week,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
Net foreign selling increased to P1.36 billion on Tuesday from P495.9 million on Monday.
“The local market plunged as investors kept a cautious stance while waiting for the policy meetings of the Federal Reserve and the Bangko Sentral ng Pilipinas. More than the interest rate decision, investors are looking forward to the policy outlook of both central banks, especially that of the Federal Reserve given the upside risks to the US’ inflation caused by President-elect Donald J. Trump’s planned protectionist policies,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
The Fed will hold its last policy meeting for the year on Dec. 17-18, while the BSP’s Monetary Board is scheduled to have its own review on Dec. 19. Both central banks are widely expected to cut benchmark interest rates by 25 basis points but signal a hawkish path ahead amid lingering uncertainties.
“The peso’s weakness against the US dollar also weighed on the market in today’s trading,” Mr. Tantiangco added.
The peso sank to a three-week low of P58.871 per dollar on Tuesday, down by 20 centavos from its P58.671 finish on Monday, Bankers Association of the Philippines data showed.
All sectoral indices closed lower on Tuesday. Financials declined by 2.51% or 57.42 points to 2,223.47; services dropped by 1.78% or 37.40 points to 2,054.09; property shed 1.29% or 31.41 points to end at 2,392.81; industrials went down by 1.25% or 113.06 points to 8,901.92; mining and oil retreated by 0.8% or 60.70 points to 7,465.64; and holding firms fell by 0.65% or 36.76 points to close the session at 5,588.43.
“JG Summit Holdings, Inc. was the top index gainer, climbing 2.55% to P20.10. Monde Nissin Corp. was the main index laggard, plummeting 7.5% to P7.40,” Mr. Tantiangco said.
Value turnover went up to P6.6 billion on Tuesday with 1.13 billion shares changing hands from the P4.64 billion with 533.34 million issues traded on Monday.
Decliners overwhelmed advancers, 124 to 65, while 51 names closed unchanged. — S.J. Talavera
