PHILIPPINE SHARES ended in the red on Monday as investors booked profits ahead of the upcoming US Federal Reserve policy meeting and in the absence of catalysts.
The main Philippine Stock Exchange index (PSEi) fell 1.14% or 76.78 points on Monday to close at 6,649.23, while the broader all-stock index fell 0.68% or 24.77 points to close at 3,605.33.
“The local stock market 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 sales on Monday amounted to P500.34 million, a reversal from the P78.98 million in net purchases recorded on Friday.
“Investors were waiting for the Federal Reserve meeting, which could influence the Bangko Sentral ng Pilipinas (BSP) decision on interest rates. Chart-wise, the market’s resistance was still pegged at 6,700-6,800, and it looked like the market was struggling to break and stay above this level,” Ms Alviar added.
The Fed is widely expected to keep its target rate at the current range of 5.25%-5.5% for the eighth consecutive time at its July 30-31 meeting.
After a favorable June inflation report, markets are betting 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 there is a 68 basis point easing priced in by December.
Meanwhile, the BSP will hold its own review on August 15, where it is expected to make its first rate cut in more than three years.
“Philippine stocks succumbed to profit-taking before the end of the month as investors looked to cash in after the index saw a substantial rise in July,” said Regina Capital Development Corp. sales chief Luis A. Limlingan. in a Viber message.
“Funds are also gearing up for another week of data, with more corporate earnings coming in,” he said.
Nearly all sector indices closed lower on Monday, with industrials the only gainer, rising 0.16% or 14.9 points to 9,174.50.
Meanwhile, financials fell 2.65% or 55.08 points to 2,021.37; mining and oil fell 1.18% or 98.57 points to 8,253.27; real estate fell by 0.89% or 23.91 points to 2,640.56; services fell by 0.84% or 16.95 points to 1,990.23; and holdings fell 0.51% or 29.98 points to 5,792.24.
“Among the index members, ACEN Corp. ranked first, up 6.19%, while Bloomberry Resorts Corp. was at the bottom, with a loss of 4.56%,” said Ms Alviar.
Value turnover rose to P5.06 billion on Monday with 658.32 million shares changing hands, while the P4.37 billion value saw 924.21 million shares traded on Friday.
There were more decliners than advancers, 105 versus 83, while 55 names ended unchanged. — RMD Ochaaf of Reuters