PHL shares end lower on profit taking before Fed
PHILIPPINE SHARES ended in the red on Monday as investors booked profits ahead of the US Federal Reserve’s upcoming policy meeting and amid the absence of catalysts.
The bellwether Philippine Stock Exchange index (PSEi) fell by 1.14% or 76.78 points to end at 6,649.23 on Monday, while the broader all shares index dropped by 0.68% or 24.77 points to close at 3,605.33.
“The local bourse lost due to the lack of a strong catalyst. Foreign investors weighed on the market,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
Net foreign selling totaled P500.34 million on Monday, a reversal of the P78.98 million in net buying recorded on Friday.
“Investors were waiting for the Federal Reserve meeting, which could influence the Bangko Sentral ng Pilipinas’ (BSP) decision regarding interest rates. Chart-wise, the market’s resistance was still pegged at 6,700-6,800, and it seemed the market is struggling to break and stay above this level,” Ms. Alviar added.
The Fed is widely expected to keep its target rate at the current 5.25%-5.5% range for the eighth straight time at their July 30-31 meeting.
After a benign June inflation report, markets are wagering that the Fed will lay the groundwork for a September rate cut at its policy meeting on Wednesday, Reuters reported.
Futures are fully priced for a quarter-point easing and even imply a 12% chance of 50 basis points (bps), and have 68 bps of easing priced in by December.
Meanwhile, the BSP is set to hold its own review on Aug. 15, where it is expected to deliver its first rate cut in over three years.
“Philippine shares succumbed to profit taking before the month’s end as investors looked to cash in after July saw a substantial rise in the index,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Funds are also gearing up for another data-heavy week, with more company earnings coming in as well,” he said.
Almost all sectoral indices ended lower on Monday, with industrials being the lone gainer, rising by 0.16% or 14.9 points to 9,174.50.
Meanwhile, financials retreated by 2.65% or 55.08 points to 2,021.37; mining and oil dropped by 1.18% or 98.57 points to 8,253.27; property went down by 0.89% or 23.91 points to 2,640.56; services declined by 0.84% or 16.95 points to 1,990.23; and holding firms decreased by 0.51% or 29.98 points to 5,792.24.
“Among the index members, ACEN Corp. achieved the top spot, surging by 6.19%, while Bloomberry Resorts Corp. was at the bottom, losing 4.56%,” Ms. Alviar said.
Value turnover rose to P5.06 billion on Monday with 658.32 million shares changing hands from the P4.37 billion with 924.21 million issues traded on Friday.
Decliners outnumbered advancers, 105 versus 83, while 55 names ended unchanged. — R.M.D. Ochave with Reuters