Share prices ended lower Wednesday as risk aversion continued to haunt investors ahead of tomorrow’s meeting of the Monetary Board.
The peso continued to depreciate for the sixth session in a row, at its lowest since November 2005 after falling as much as 0.6 percent intraday.
The Philippine Stock Exchange index (PSEi) was down 117.19 points to 6,168, a 1.86 percent drop.
The broader all shares index was down 40.32 points to 3,328.35, a 1.2 percent drop.
Losers edged gainers 115 to 68 with 48 stocks unchanged. Trading turnover reached P4.27 billion.
The peso closed at 54.47 to the dollar, down from 54.265 on Tuesday.
The currency opened at 54.30, an intraday high and hit a low of 54.635. Trading turnover reached $1.35 billion.
Globally, the shift to higher rates by several major central banks has sparked worries about a world recession, leading to a sell-off in riskier assets over recent months.
“Ongoing global growth concerns, inflation worries and fears of tighter financial conditions continue to keep a leash on risk appetite,” Maybank analysts said in a note.
Regional currencies fell across the board against the US dollar, undoing a brief recovery in the past session.
Investors will closely watch policy decisions from Philippine and Indonesian central banks on Thursday, with analysts differing over how aggressively the banks will act to tame accelerating inflation in the Southeast Asian nations.
Focus will also be on US Federal Reserve Chair Jerome Powell’s semi-annual testimony before Senate banking panel later in the day, where he is expected to reiterate his “unconditional” commitment to restore price stability.
Yeap Jun Rong, a market strategist with IG said that in Asia, “gains may seem capped by some wait-and-see sentiments, heading into Fed Chair Jerome Powell’s comments.”
Luis Limlingan, managing director at Regina Capital and Development Corp., said the market has dipped into oversold territory after its latest drop.
“The Bangko Sentral ng Pilipinas (BSP) is scheduled to hold its fourth policy-setting meeting on Thursday. As per Bloomberg, the street widely expects a 50bp rate hike following the Fed’s aggressive tightening last week. However, it is noted that incoming BSP Governor Felipe Medalla hinted the pace of subsequent tightening could be gradual,” he said.
Investors await Powell’s testimony before the US Congress overnight, which could further give a hint on the US’ policy tack going forward.
“US stocks though rose last night as investors assessed a more aggressive Federal Reserve and rising chances of a recession. Note, however, that some investors have doubts that this bounce will be the one that marks the turn, especially with no apparent news or catalyst driving it,” Limlingan said.
Most actively traded International Container Terminal Services Inc. was down P8.40 to P186.70. SM Prime Holdings Inc. was down P1.35 to P35.10. Ayala Land Inc. was down P1.15 to P26.50. Converge ICT Solutions Inc. was down P0.02 to P19.30. Globe Telecom Inc. was steady at P2,100. Metro Pacific Investments Corp. was down P0.02 to P3.60. PLDT Inc. was down P30 to P1,760. SM Investments Corp. was down P11 to P763. Emperador Inc. was up P0.70 to P18.70. Philweb Corp. was down P0.45 to P5.50.
