Shares drop as market awaits Fed, BSP decisions

Philippine shares declined anew on Wednesday as investors anticipate the policy decisions of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) dropped by 36.65 points or 0.58% to end at 6,255.74 on Wednesday, while the broader all shares index fell by 14.32 points or 0.42% to close at 3,339.14.

“The local bourse dropped by 36.65 points to 6,255.74 as investors awaited the decisions of the Federal Reserve and the Bangko Sentral ng Pilipinas regarding interest rates in the US and the Philippines, respectively,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Aside from the interest rate decisions, investors also want to know their outlook on the inflation rate and the timing of monetary policy easing,” Ms. Alviar added.

The Fed was set to announce its policy decision overnight after a two-day review. It was expected to keep its target rate unchanged at 5.25-5.5% for a third straight meeting.

Meanwhile, the BSP will hold its final policy meeting for this year on Thursday.

A BusinessWorld poll conducted last week showed 15 out of 17 analysts expect the Monetary Board to hold the target reverse repurchase rate steady at 6.5% for a second straight meeting.

“Philippine shares traded with a negative bias as traders braced for the final Fed meeting of the year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

“Many started to position themselves ahead of the BSP’s policy-setting meeting on Dec. 14 and ahead of the release of November inflation data in the US,” he added.

The November US producer price index report was set to be released overnight.

A report released by the US Labor department on Tuesday showed that the US consumer price index (CPI) edged up 0.1% last month after being unchanged in October, Reuters reported.

In the 12 months through November, the CPI increased 3.1% after rising 3.2% in October.

Back home, almost all sectoral indices ended lower on Wednesday. Property went down by 32.75 points or 1.17% to 2,754.22; holding firms retreated by 49.87 points or 0.83% to 5,957.68; mining and oil declined by 52.82 points or 0.55% to 9,512.45; financials dropped by 6.42 points or 0.37% to 1,691.81; and industrials decreased by 12.87 points or 0.14% to 8,782.54.

Meanwhile, services rose by 2.65 points or 0.17% to 1,552.56.

Value turnover went up to PHP 3.55 billion on Wednesday with 245.11 million shares changing hands from the PHP 3.25 billion with 314.76 million issues seen the previous trading day.

Decliners outnumbered advancers, 95 to 64, while 47 names closed unchanged.

Net foreign selling stood at PHP 280.55 million on Wednesday versus the PHP 158.02 million in net buying seen on Tuesday. — R.M.D. Ochave with Reuters