PSEi sinks to 6,500 level anew amid lack of leads

The main index dropped to the 6,500 level again on Monday as investors stayed on the sidelines while looking for fresh catalysts.

The benchmark Philippine Stock Exchange index (PSEi) declined by 0.72% or 48.29 points to end at 6,571.60 on Monday, while the broader all shares index fell by 0.38% or 13.41 points to close at 3,510.08.

Monday’s finish was the lowest in almost two weeks and was the first time the PSEi ended at the 6,500 level since it closed at 6,558.63 on May 15.

“The local market moved sideways as investors had few fundamental leads. Technically, traders were taking profits as the main index encountered resistance from a confluence of moving averages near the 6,700 level. Investors are in a wait-and-see mode, anticipating further guidance on the direction of interest rates,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

“The next major data that could provide insight into global interest rates is due later this week, with the release of the US Q1 GDP (first-quarter gross domestic product) and, more importantly, the latest US PCE (personal consumption expenditures) data, which many view as a potential indicator of increased inflationary pressures,” Mr. Vistan said.

The second estimate for first-quarter US GDP data will be released on May 30, Thursday, while April US PCE data will come out on May 31, Friday.

“MSCI rebalancing outflow and peso volatility were behind poor market sentiment, overriding positives such as double-digit corporate earnings of 13% for PSEi members and BSP’s (Bangko Sentral ng Pilipinas) dovish tilt,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.

“Investors were awaiting data that could influence the decision of the Bangko Sentral ng Pilipinas regarding interest rates,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar added in a Viber message.

BSP Eli M. Remolona, Jr. this month said the Monetary Board could begin easing their policy stance by the second half, with a 25-basis-point cut possible at their Aug. 15 meeting.

This would mean that the BSP could kick off its easing cycle earlier than the US Federal Reserve, which is expected to begin cutting rates by September.

Almost all sectoral indices closed lower on Monday, with industrials being the sole gainer, rising by 0.25% or 23.88 points to 9,263.85.

Meanwhile, mining and oil declined by 1.34% or 125.05 points to 9,152.25; financials went down by 0.9% or 18.05 points to 1,979.80; property dropped by 0.84% or 21.06 points to 2,480.51; services retreated by 0.78% or 15.67 points to 1,991.72; and holding firms lost 0.67% or 39.87 points to 5,870.73.

Value turnover fell to P4.19 billion on Monday with 3.42 billion shares changing hands from the P4.47 billion with 557.45 million issues traded on Friday.

Decliners outnumbered advancers, 104 versus 84, while 45 names were unchanged.

Net foreign selling stood at P487.86 million on Monday versus the P203.34 million in net buying seen on Friday. — R.M.D. Ochave