Equities 3 MIN READ

PSEi drops further on month-end window dressing

June 1, 2023By BusinessWorld

STOCKS closed lower on Wednesday due to month-end window dressing and amid progress in the US debt ceiling bill and the results of the Morgan Stanley Capital International (MSCI) rebalancing.

The Philippine Stock Exchange index (PSEi) declined by 33.31 points or 0.51% to close at 6,477.36 on Wednesday, while the broader all shares index went down by 16.75 points or 0.48% to end at 3,458.30.

“Philippine shares slid on heavy turnover as funds were tracking the latest MSCI rebalancing results and with the end-of-month window dressing at hand,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

“One factor that has weighed on the market in recent weeks is the fight over the debt ceiling. The Fiscal Responsibility Act appeared poised to pass a key committee hurdle on Tuesday, with a full House floor vote expected on Wednesday night, according to a tentative House voting schedule,” Mr. Limlingan added.

Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message that the PSEi was weighed down by “huge” net foreign selling amid lingering concerns overseas.

“Overseas, investors were still waiting for the developments on US debt ceiling particularly with the growing opposition on the tentative deal. In addition to the negative sentiment was the contraction of China’s factory activity,” Ms. Alviar added.

Net foreign selling surged to PHP 4.15 billion on Wednesday from PHP 85.53 million on Tuesday.

Legislation brokered by President Joseph Biden and House Speaker Kevin McCarthy to lift the USD 31.4-trillion US debt ceiling and achieve new federal spending cuts passed an important hurdle late on Tuesday, advancing to the full House of Representatives for debate and an expected vote on passage on Wednesday, Reuters reported.

The House Rules Committee voted 7-6 to approve the rules allowing debate by the full chamber. Two committee Republicans, Representatives Chip Roy and Ralph Norman, bucked their leadership by opposing the bill.

House passage would send the bill to the Senate. The measure needs congressional approval before June 5, when the Treasury department could run out of funds to pay its debts for the first time in US history.

Back home, the majority of sectoral indices closed lower on Wednesday except for finanwcials, which rose by 8.01 points or 0.44% to 1,812.01; and mining and oil, which went up by 1.35 points or 0.01% to 9,964.78.

Meanwhile, property declined by 50.46 points or 1.86% to 2,654.15; services dropped by 15.68 points or 1.02% to 1,517.94; industrials fell by 29.48 points or 0.31% to 9,201.32; and holding firms went down by 12.78 points or 0.19% to 6,490.26.

Value turnover surged to PHP 24.54 billion on Wednesday with 2.27 billion shares changing hands from the PHP 4.46 billion with 1.11 billion issues traded on Tuesday.

Decliners outnumbered advancers, 94 versus 83, while 49 names closed unchanged. — By A.H. Halili with Reuters

This article originally appeared on bworldonline.com

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