Share prices closed lower Tuesday on risk aversion. The peso closed up.
The Philippine Stock Exchange index was down 76.6 points, a 1.25 percent drop to 6,047.97.
The broader All Shares index was down 34.94 points or 1.06 percent to 3,247.30.
Losers edges gainers 128 to 62 with 43 stocks unchanged. Trading turnover reached P3.65 billion.
The peso closed at 56.755 to the dollar, up from 56.866 on Monday. The currency opened at 56.71 and hit a high of 56.70 and a low of 56.83. Trading turnover reached $1.17 billion.
The Bangko Sentral ng Pilipinas (BSP) is set to meet Thursday, with consensus pointing to the local monetary officials keeping rates.
The US Federal Reserve’s two-day policy meeting will start Tuesday night. Markets expect the Fed to leave interest rates unchanged and the focus will be on the central bank’s forward guidance.
“Asian currencies are consolidating lower ahead of the FOMC (Federal Open Market Committee), given risks of a hawkish stance from the Fed amid strong growth, and potential signalling of one more rate hike if high inflation remains sustained,” said Wei Liang Chang, FX and credit strategist at DBS Bank.
Another key event this week is the Bank of Japan’s policy decision on Friday.
Juan Paolo Colet, managing director at Regina Capital and Development Corp., said the market dropped to its lowest close in more than a year “on concerns rising oil prices and other inflationary pressures will force the BSP and Federal Reserve to keep policy rates elevated for longer.”
“Both central banks are widely expected to hold rates steady during their meetings this week, but growing uncertainty about the path of interest rates over the next several months has soured investor sentiment on local equities,” he said.
Most actively traded Aboitiz Power Corp. was down P1.30 to P30.40. BDO Unibank Inc. was up P0.30 to P129.80. Ayala Land Inc. was down P1to P26.80. SM Prime Holdings Inc. was down P0.55 to P28.70. Century Pacific Food Inc. was up P0.05 to P29. GT Capital Holdings Inc. was down P21.50 to P565. Bank of the Philippine Islands was down P1.7o to P106.30.
Metropolitan Bank and Trust Co. was up P0.50 to P52.50. Semirara Mining and Power Corp. was down P0.20 to P34.80. Manila Electric Co. was down P2.60 to P360.
