Local shares snap six-day rally on profit taking
PHILIPPINE SHARES snapped their six-day rally on Tuesday as investors pocketed their gains ahead of the policy decision of the US Federal Reserve.
The Philippine Stock Exchange index (PSEi) fell by 1.02% or 69.15 points to end at 6,700.49 on Tuesday, while the broader all shares index declined by 0.48% or 17.34 points to close at 3,525.94.
“This Tuesday, the local market dropped by 69.15 points (1.02%) to 6,700.49 as investors took profits after a six-day rally. Investors booked gains ahead of the Fed’s meeting to avert risks regarding the Fed’s decision,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.
“The bourse struggled to have a clear direction early in the day before heavy selling occurred near the closing bell. This reflected the cautiousness of the investors throughout the session,” he added.
The Fed began a two-day policy review overnight. It is widely expected to keep its target rate steady at the 5.25%-5.5% range for a sixth straight meeting and maintain its hawkish tone amid sticky inflation.
Traders continue to pare back bets of Fed rate cuts this year amid hotter-than-expected US economic data and stubborn inflation numbers, Reuters reported.
A rate cut in September was looking like a close call at just 44%, according to CME Group’s FedWatch tool.
“Philippine shares fell as the index failed to continue its rally. Shares settled at 6,700 flat. Wall Street saw stocks rise as the Fed is expected to meet today, weighing on the country’s interest rate policy,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Tuesday.
“Oil prices fell, as possibilities of a ceasefire agreement in the Middle east calmed investors’ worry of greater conflict in the region. Brent contract declined by 1.23% to $88.40 per barrel, while West Texas Intermediate contract fell by 1.45% to $82.63 per barrel,” he added.
All sectoral indices ended lower on Tuesday. Property lost 1.99% or 50.95 points to close at 2,509.49; services retreated by 1.14% or 21.51 points to 1,856.90; financials went down by 0.75% or 15.83 points to 2,094.20; holding firms decreased by 0.59% or 37.28 points to 6,189.77; mining and oil sank by 0.2% or 17.99 points to 8,784.58; and industrials inched down by 0.23 point to 9,014.34.
“Among the index members, GT Capital Holdings, Inc. was at the top, climbing 4.66% to P639.50. SM Prime Holdings, Inc. lost the most, dropping 2.95% to P27.95,” Mr. Plopenio said.
Value turnover surged to P22.31 billion on Tuesday with 1.5 billion issues changing hands from the P5.32 billion with 603.99 million shares traded on Monday.
Advancers beat decliners, 110 versus 87, while 51 names were unchanged.
Net foreign selling stood at P16.58 billion on Tuesday, a reversal of the P1.18 billion in net inflows on Monday.
The stock market is closed on Wednesday for Labor Day. — R.M.D. Ochave with Reuters
