Local shares retreat as investors pocket profits

Philippine shares declined on Wednesday as investors pocketed their gains from the market’s strong performance recently.

The Philippine Stock Exchange index (PSEi) retreated by 44.43 points or 0.7% to finish at 6,265.14 on Wednesday, while the broader all shares index fell by 19.02 points or 0.56% to close at 3,339.68. 

“The market is down on profit taking after the recent multi-week rally and ahead of the Morgan Stanley Capital International (MSCI) rebalancing implementation by month-end,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message. 

“The local bourse dropped by 44.43 points to 6,265.14 as investors took some gains after two consecutive days of market rally,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar likewise said in a Viber message.

Bets on the US Federal Reserve’s next policy mood also affected trading, she added.

“Overseas, sentiment was further weighed down by Fed Governor Michelle Bowman’s statement that more rate hikes may be necessary to keep policy sufficiently restrictive to bring inflation down to the 2% target,” Ms. Alviar said.

Fed Governor Michelle Bowman said the central bank will likely need to raise borrowing costs further in order to bring inflation back down to its target, Reuters reported.

Meanwhile, Fed Governor Christopher Waller flagged the possibility of lowering the Fed policy rate in the months ahead if inflation continues to come down. Mr. Waller also said he was “increasingly confident” the current interest rate setting would prove adequate to lower inflation to the Fed’s 2% target.

The Fed this month kept its target rate at the 5.25%-5.5% range for the second consecutive meeting.

It will hold its last review for the year on Dec. 12-13.

Back home, the majority of sectoral indices ended in the red on Wednesday. Property declined by 86.13 points or 3.09% to 2,694.05; industrials dropped by 44.44 points or 0.5% to 8,763.75; financials decreased by 3.94 points or 0.22% to 1,742.31; and holding firms went down by 1.33 points or 0.02% to 6,006.29.

“The property sector had the largest loss, dropping by 3.10%, largely influenced by the 4.27% decline of SM Prime Holdings, Inc. Meanwhile, San Miguel Corp. was at the top, increasing by 1.89%,” Philstocks Financial’s Ms. Alviar said. 

On the other hand, mining and oil rose by 60.19 points or 0.62% to 9,741.16 and services went up by 4.04 points or 0.26% to 1,525.12. 

Value turnover went up to PHP 5.75 billion on Wednesday with 449.96 million shares changing hands from the PHP 5.34 billion with 382.74 million issues traded the previous day.

Decliners outnumbered advancers, 106 against 70, while 34 names closed unchanged.

Net foreign buying dropped to PHP 202.33 million on Wednesday from PHP 670.36 million on Tuesday. — RMDO with Reuters