June 23, 2018, 6:10 am
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Stocks down

Share prices ended lower Wednesday amid risk-off sentiments for local investors.

Shares fell as much as 2.5 percent, their sharpest in nearly six weeks, on resumption of trade after the Independence Day holiday on Tuesday.

The Philippine Stock Exchange index (PSEi) ended down 168.32 points to 7,602.98, a 2.17 percent drop. 

The broader all shares index was down 75.19 points to 4,629.35, a 1.6 percent drop. 

Losers edged gainers 127 to 66 with 47 stocks unchanged. 

Trading turnover reached P7.16 billion. 

Luis Limlingan, managing director at Regina Capital Development Corp., said investors’ attention turned to overseas to the detriment of the local market. 

Limlingan said investors’ attention now focuses on the US Fed’s likely prospects “to raise rates at its meeting, amid strong evidence that the labor market has overshot full employment following a 48-year low in the May jobless rate (3.75 percent).” 

“Although this has been factored in by many analysts, another point of contention is the number of times the Fed will increase rates this year. Many are split whether this will occur 3x-4x. With that added speculation, the peso slid further, making the local market even less attractive, hence prompting the massive exodus today (Wednesday),” he said.

Online broker 2tradeasia.com meanwhile said sessions “may continue to drift sideways, unless prospective bargain hunters see supply-side pressure on intra-day rises subside.” 

Most actively traded SM Investments Corp. was down P28 to P900. Metropolitan Bank and Trust Co. was down P2.15 to P77.05. Ayala Corp. was down P41 to P937. BDO Unibank INc. was down P1.50 to P136. SM Prime Holdings Inc. was down P0.50 to P36.50.

Other Southeast Asian stock markets also declined , in line with broader Asia ahead of the US Federal Reserve’s policy decision which could give cues on future rate hikes.

The Fed is widely expected to raise interest rates for the second time this year after a move in March, but the bigger question for investors is the outlook for future monetary tightening amid an ongoing economic expansion. 

“Trading volumes are a bit lower than average. A lot of investors are staying on the sidelines ahead of the Fed’s decision today and comments from the ECB (European Central Bank) tomorrow,” said Joel Ng, an analyst at KGI securities.

“I don’t think the rate decision will be negative for the markets, it’s just that markets are a bit slower in June.”

The ECB will debate whether to end a 2.55 trillion euro bond purchase scheme this year as inflation is on the rise and growth has lasted five years.

Singapore shares fell nearly 1 percent to their lowest since April 6, dragged by the city-state’s big banks. United Overseas Bank, DBS Group Holdings and Oversea-Chinese Banking Corp Ltd all shed over 1.5 percent.

Malaysian shares extended their fall into a fourth session with Public Bank, the country’s largest lender by market capitaliZation, declining nearly 2 percent.

Thai shares fell after two straight sessions of gain, while Vietnam was little changed following a sharp drop in the previous session.

Indonesian financial markets are closed until June 19 for Eid Al-Fitr. 
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