PH shares fall as market braces for rate decision

Philippine stocks ended lower on Wednesday as investors braced for the central bank’s policy meeting.

The Philippine Stock Exchange index (PSEi) dropped by 0.75% or 49.73 points to end at 6,558.63 on Wednesday, while the broader all shares index fell by 0.35% or 12.49 points to close at 3,499.42.

“The local bourse lost 49.73 points (0.75%) to 6,558.63 as investors took a cautious stance, selling some shares ahead of the Bangko Sentral ng Pilipinas (BSP) meeting,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Investors were waiting for the BSP’s outlook on inflation as well as on interest rates,” she added.

The Monetary Board will meet to discuss policy on May 16, Thursday.

A BusinessWorld poll showed 17 out of 19 analysts expect the BSP will maintain its policy rate at a 17-year high of 6.5% for a fifth straight meeting this week.

“In the United States, equities jumped following the latest reading of the producer price index (PPI), which exceeded forecasts, dampening expectations of potential rate cuts by the Federal Reserve later this year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Asian stocks rose on Wednesday while the dollar drifted lower as traders weighed mixed US producer price data and braced for the crucial consumer price report later in the day that is likely to influence the US Federal Reserve’s near-term policy path, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.65%, scaling a fresh 15-month high and taking its gains to 4% so far this month. Japan’s Nikkei advanced 0.58%.

Data overnight showed US producer prices increased more than expected in April, indicating that inflation remained stubbornly high early in the second quarter.

Fed Chair Jerome Powell called the PPI data “mixed” rather than “hot” because prior data was revised lower. That, along with Mr. Powell’s comments reassuring investors that the US central bank’s next move was unlikely to be a hike, lifted sentiment.

Back home, almost all sectoral indices closed lower, with industrials being the lone gainer, rising by 0.81% or 73.68 points to 9,169.22.

Meanwhile, holding firms declined by 1.62% or 95.50 points to 5,781.95; financials dropped by 1.21% or 25.01 points to 2,031.46; services went down by 0.53% or 10.63 points to 1,970.15; mining and oil decreased by 0.06% or 5.54 points to 9,199.33; and property inched down by 0.03% or 0.73 points to 2,460.57.

Value turnover rose to PHP 5.5 billion on Wednesday with 464.27 million shares switching hands from the PHP 4.92 billion with 498.39 million issues traded on Tuesday.

Decliners outnumbered advancers, 109 versus 80, while 48 names ended unchanged.

Net foreign selling went down to PHP 84.66 million on Wednesday from PHP 158.14 million on Tuesday. — R.M.D. Ochave with Reuters