Shares continue to decline amid lack of catalysts

PHILIPPINE STOCKS dropped further on Wednesday amid a lack of fresh leads, with the market looking ahead to the US Federal Reserve’s next policy meeting and economic data that could affect the Bangko Sentral ng Pilipinas’ (BSP) own decision next month.

The benchmark Philippine Stock Exchange index fell by 18.37 points or 0.28% to close at 6,446.35 on Wednesday, while the broader all shares index dropped by 7.40 points or 0.21% to end at 3,464.12.

“Shares on the Philippine Stock Exchange edged lower in fairly lackluster trading given the lack of any news or catalyst,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“Volatility remained in the market as investors scrutinized US economic indicators, US Federal Reserve commentary and corporate earnings for clues about the path for interest rates,” Mr. Arce added.

He said investors are also awaiting key Philippine economic data releases in the coming weeks, including the April inflation report and first quarter gross domestic product (GDP) data.

April consumer price index data will be released by the Philippine Statistics Authority on May 5, while the GDP report will be out on May 11.

“Traders have to contend with looming macroeconomic headwinds after the broader field of companies report quarterly results. Inflation and the prospect of further tightening from the Federal Reserve will return to center stage,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The Fed will meet to review its policy settings on May 2-3. Markets are pricing in another 25-basis-point (bp) increase at that review.

The US central bank raised the fed funds rate by 25 bps last month to 4.75%-5%. It has hiked rates by 475 bps since March 2022.

Meanwhile, the BSP will have its own review on May 18.

The Monetary Board last month hiked borrowing costs by 25 bps to help bring down elevated inflation, with its policy rate now at 6.25%.

Since May 2022, the Philippine central bank raised benchmark rates by of 425 bps.

The majority of sectoral indices closed lower on Wednesday except for financials, which rose by 8.14 points or 0.45% to 1,799.99.

Meanwhile, mining and oil declined by 154.45 points or 1.41% to 10,782.98; property went down by 21.84 points or 0.81% to 2,671.41; holding firms fell by 29.46 points or 0.46% to 6,275.16; services dropped by 6.79 points or 0.42% to 1,600.18; and industrials inched down by 4.33 points or 0.04% to end at 9,281.36.

Value turnover went up to PHP 3.40 billion on Wednesday with 441.33 million shares changing hands from the PHP 3 billion with 770.44 million issues traded on Tuesday.

Decliners narrowly outnumbered advancers, 88 versus 82, while 51 names closed unchanged.

Net foreign selling went down to PHP 30.41 million on Wednesday from PHP 142.88 million on Tuesday. — A.H. Halili