THE MAIN INDEX inched lower on Wednesday as sentiment soured amid a weaker peso and following Wall Street’s slump overnight.
The Philippine Stock Exchange index (PSEi) dropped by 0.25% or 19.31 points to close at 7,437 on Wednesday, while the broader all shares index rose by 0.27% or 11.11 points to end at 4,097.56.
“The local market edged lower this Wednesday after two straight days of being up,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“The bourse declined with the peso’s weakness against the dollar seen as a weighing factor. Spillovers from Wall Street’s overnight decline also weighed on Wednesday’s trading,” he added.
On Tuesday, the peso sank to an over two-month low of P57.865 per dollar. It rebounded on Wednesday, rising by 16.5 centavos to end at P57.70.
Meanwhile, Wall Street’s major stock indexes closed lower on Tuesday, with a 1% drop in the technology-heavy Nasdaq leading losses as chip stocks tumbled on demand concerns while the energy sector fell 3% as oil prices dropped, Reuters reported.
The Dow Jones Industrial Average fell 324.80 points or 0.75% to 42,740.42; the S&P 500 lost 44.59 points or 0.76% to 5,815.26; and the Nasdaq Composite lost 187.10 points or 1.01% to 18,315.59.
Notably, both the Dow and the S&P 500 registered record closing highs in the previous session.
“Philippine stocks traded sideways ahead of the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board decision on benchmark interest rates,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia added in a Viber message.
“A 25-basis-point (bp) rate cut was widely expected but it was not set in stone yet, so it’s likely that investors opted to pocket their gains in case of a negative surprise,” Mr. Garcia said.
The Monetary Board on Wednesday continued its easing cycle as it cut its policy rate by 25 bps to 6%, as expected by 16 out of 19 analysts in a BusinessWorld poll.
Rates on the BSP’s overnight deposit and lending facilities were also reduced to 5.5% and 6.5%, respectively.
Majority of sectoral indices ended lower on Wednesday. Mining and oil dropped by 1.08% or 95.05 points to 8,669.49; property lost 0.83% or 24.63 points to end at 2,944.57; holding firms went down by 0.56% or 35.52 points to 6,291.19; and services declined by 0.04% or 1.07 points to 2,262.06.
Meanwhile, industrials climbed by 0.31% or 32.08 points to 10,102.59; and financials inched up by 0.03% or 0.94 point to 2,401.74.
Value turnover increased to P6.95 billion on Wednesday with 831.76 million shares traded from the P6.41 billion with 584.49 million issues that changed hands on Tuesday.
Decliners outnumbered advancers, 101 versus 86, while 75 names ended unchanged.
Net foreign buying increased to P841.27 million on Wednesday from P638.15 million on Tuesday. — R.M.D. Ochave with Reuters
