Stocks decline on MSCI rebalancing, trade talks

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PSE bells

SHARES SUFFERED a bloodshed on Thursday on the back of the MSCI rebalancing, alongside inflation concerns at home and sluggish developments in trade war negotiations overseas.

The 30-member Philippine Stock Exchange index (PSEi) fell 2.32% or 183.63 points to close at 7,705.49 on the last day of February. The all-shares index likewise tumbled 1.64% or 79.61 points to 4,769.75.

Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said the PSEi’s decline was due to the MSCI rebalancing.

“ICT (International Container Terminal Services, Inc.) had the highest upweight, hence the highest value turnover, while heavyweights SMPH (SM Prime Holdings, Inc.), ALI (Ayala Land, Inc.), BDO (BDO Unibank, Inc.), SM (SM Investments Corp.), AC (Ayala Corp.), and JGS (JG Summit Holdings, Inc.) had downweights, but not as large as ICT’s shift in weight,” Mr. Perez said in an e-mail.

The MSCI measures the performance of large and mid-cap sectors in the local market, tracking about 85% of the free float-adjusted market cap of the index.

Diversified Securities, Inc. Equities Trader Aniceto K. Pangan, meanwhile, blamed profit taking for the main index’s decline yesterday.

“Market continued its profit taking as most regional markets were downed due to the following factors: locally, fuel prices continue to go up with jeepney operators asking for the increase in minimum fare to P10 thus causing inflation,” Mr. Pangan said in a text message.

Mr. Pangan also noted that the negative sentiment was caused by the slow trade negotiations between the United States and China.

Reports cited strains showing between US President Donald J. Trump’s relationship with US Trade Representative Robert Lighthizer, which many fear would lead to a weak and inadequate deal with China.

With this, most Asian markets ended in negative territory. Wall Street indices also ended mixed, with the Dow Jones Industrial Average dropping 0.28% or 72.82 points to 25,985.16, and the S&P 500 index slipping 0.05% or 1.52 points to 2,792.38. Meanwhile, the Nasdaq Composite index eked out a gain of 0.07% or 5.21 points to 7,554.51.

Back home, all sectoral indices took a dive on Thursday, led by financials which went down 3.03% or 53.47 points to 1,708.16.

Holding firms slumped 2.43% or 192.42 points to 7,725.12; mining and oil shed 2.24% or 194.89 points to 8,491.76; industrials went down 2.04% or 236.13 points to 11,341.40; services dropped 1.78% or 27.88 points to 1,534.99; and property slipped 0.91% or 36.68 points to 3,981.72.

Value turnover climbed to P17.58 billion as 2.85 billion shares changed hands, higher than the previous session’s P7.43 billion.

Foreign investors booked a net foreign buying figure of P3.72 billion yesterday versus net sales of P250.66 million on Wednesday. Mr. Perez, however, noted that Thursday would have recorded a net outflow of P1.2 billion if not for PAL Holdings, Inc.’s P4.9-billion block transaction. — Arra B. Francia