PHILIPPINE SHARES closed lower on Tuesday as investors cashed in gains from the market’s two-day climb, and amid growing expectations of a fourth straight rate hike from the Bangko Sentral ng Pilipinas (BSP) next week as inflation risks linger.
The Philippine Stock Exchange index (PSEi) went down by 0.73% or 41.64 points to close at 5,701.54, while the broader all shares index slumped by 0.62% or 19.76 points to 3,183.35.
“The local index closed lower on Tuesday as investors once again moved quickly to lock in gains… The index appears to be trading within a tight range (5,580-5,760) amid a lack of strong catalysts,” COL Financial Group, Inc. Research Analyst Denise Joaquin said in a Viber message.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said profit taking ensued following two consecutive sessions of gains.
“The profit taking reflects continued caution among market participants amid lingering uncertainties. Investors remain watchful of external developments and domestic economic conditions,” he said in a Viber message.
“The local market declined due to concerns over the Philippines’ economic growth outlook amid rising inflation and mounting expectations of another BSP rate hike in their Oct. 22 meeting. Elevated bond yields also pressured the market,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco added in a Viber message.
Analysts widely expect a fourth straight rate hike from the BSP next week after Philippine headline inflation picked up to an over three-year high of 7.2% in September, with the fresh escalation of the Middle East war and expectations of strong El Niño conditions until next year also posing a threat to inflation expectations.
The BSP’s policy-setting Monetary Board has delivered a total of 75 basis points in rate increases since it began its tightening cycle in April to rein in price risks.
All sectoral indices closed lower. Holding firms slid by 0.85% or 36.16 points to 4,241.32; services sank by 0.85% or 26.27 points to 3,065.98; financials dropped by 0.8% or 14.01 points to 1,739.14; property fell by 0.72% or 12.64 points to 1,738.92; industrial retreated by 0.54% or 39.95 points to 7,383.00; and mining and oil declined by 0.36% or 69.46 points to 19,142.55.
Decliners beat advancers, 112 to 77, while 59 names were unchanged.
“PLDT Inc. was the day’s index leader, climbing 3.91% to P1,195. ACEN Corp. was the main index laggard, falling 4.48% to P2.56,” Mr. Tantiangco said.
Value turnover went down to P4.29 billion on Tuesday with 862.08 million shares traded from the P6.19 billion with 513.66 million issues that changed hands on Monday.
Net foreign selling rose to P468.75 million from P332.6 million previously. — Alexandria Grace C. Magno