Stocks drop anew on increased selling pressure

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PSE BGC bells

By Denise A. Valdez, Senior Reporter

LOCAL SHARES surrendered on Wednesday as investors took profits ahead of the policy decision of the US Federal Reserve.

The bellwether Philippine Stock Exchange index (PSEi) gave up 71.59 points or 1.19% to close at 5,946.62. The broader all shares index likewise dropped 25.76 points or 0.71% to end at 3,565.81.

“The movement of PSEi is a market consolidation wherein investors are waiting for positive catalysts in order to push the index,” Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a text message.

The market’s activity on Wednesday was mainly downward, with the PSEi opening at its peak of 5,996.99 and dropping to a low of 5,943.92 before trimming losses at the last minute to close at 5,946.62.

Investors were awaiting news on the policy meeting of the US Federal Reserve which was set to conclude overnight, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

Increased tensions between the United States and China also reduced investor optimism after the World Trade Organization ruled that the tariffs the US imposed on Chinese goods in 2018 violated international trade rules, Mr. Limlingan said.

“Despite some uptick for both foreign direct investments and cash remittances, the underlying problem has not been resolved which is the containment of the virus,” Philstocks’ Mr. Tan said. “The market needs conviction in order to move forward with the current economic data.”

Most Asian shares rose on Wednesday, extending a rally driven by upbeat Chinese and US economic data, but investors showed little appetite for big bets as they awaited the Federal Reserve’s view on the economy at its policy meeting.

Investors are focusing on the Fed’s policy statement due Wednesday, the first since Chair Jerome Powell announced an increased tolerance for higher inflation. The Fed was due to make its statement at 1800 GMT Wednesday, followed by a news conference from Mr. Powell.

Nearly all sectoral indices at the PSE ended Wednesday’s session in red territory. Industrials erased 134.65 points or 1.67% to 7,891.01; holding firms wiped out 83.08 points or 1.31% to 6,230.33; financials shaved off 11.87 points or 1.03% to 1,141.06; property shed 19.82 points or 0.70% to 2,779.48; and services trimmed 7.01 points or 0.48% to 1,454.47. Mining and oil was the sole index that posted gains, climbing 43.49 points or 0.71% to 6,136 at the end of the session.

Value turnover stood at P5.36 billion with 652.4 million issues switching hands, slightly lower than the previous day’s P5.55 billion with 829.03 million issues.

Decliners outpaced advances by 10 names, 97 against 87, while 52 names ended unchanged.

Foreigners were sellers for the fourth straight day, with net outflows growing to P843.92 million on Wednesday from P791.21 million on Tuesday. — with Reuters