PSEi sinks to 5,900 level after BSP tightening

The main index sank to the 5,900 level on Friday after the Bangko Sentral ng Pilipinas (BSP) delivered an off-cycle rate hike and ahead of the shortened trading week.

The benchmark Philippine Stock Exchange index (PSEi) went down by 56.50 points or 0.93% to close at 5,961.99 on Friday, while the broader all shares index shed 19.55 points or 0.59% to end at 3,246.47.

Week on week, the PSEi likewise fell by 180.91 points or 2.95% from its close of 6,142.90 on Oct. 20.

“The PSEi experienced another weekly decline, briefly dipping below the 6,000 level, after the unexpected off-cycle rate hike by the central bank, pushing its policy rate to 6.5%,” Globalinks Securities and Stocks, Inc. Senior Trader Mark V. Santarina said in a Viber message.

The BSP on Thursday raised benchmark interest rates by 25 basis points (bps) before a scheduled review as it seeks to anchor inflation expectations, bringing its policy rate to 6.5%.

The move came ahead of the Monetary Board’s scheduled meeting on Nov. 16. BSP Governor Eli M. Remolona, Jr. said next month’s review will push through and another rate increase could be on the table as they will have new data to consider by then.

Thursday’s move was the first hike since March and brought total increases since May 2022 to 450 bps. The BSP held rates steady in its last four meetings before the hike.

“[Last] week’s break of the 6,000 psychological support zone is likely an aftereffect of a very short trading [this] week — expect participation to resume after the three-day trading break,” online brokerage 2TradeAsia.com said in a report on Friday.

Philippine financial markets will be closed for public holidays on Oct. 30, Nov. 1, and Nov. 2.

The PSEi ended the week lower as investors “digested a slew of corporate earnings releases locally,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Several listed firms released their third quarter results last week, including Bank of the Philippine Islands, Metropolitan Bank & Trust Co., and Robinsons Retail Holdings, Inc.

All sectoral indices fell on Friday. Holding firms dropped by 76.24 points or 1.31% to 5,722.15; property declined by 32.32 points or 1.27% to 2,513.41; industrials decreased 62.78 points or 0.73% to 8,533.89; services went down by 6.18 points or 0.42% to 1,451.32; mining and oil shed 21.07 points or 0.21% to 9,846.12; and financials lost 3.37 points or 0.19% to end at 1,705.71.

Value turnover went up to PHP 3.76 billion on Friday with 349.82 million shares changing hands from the PHP 3.06 billion with 428.34 million issues seen on Thursday.

Decliners outnumbered advancers, 93 versus 78, while 53 shares closed unchanged.

Net foreign selling went up to PHP 328.95 million on Friday from PHP 319.07 million on Thursday. — S.J. Talavera