THE MAIN INDEX extended its losing streak on Tuesday, dropping to the 6,200 level for the first time in nearly seven months, before the release of key US inflation reports that could affect the Federal Reserve’s policy easing cycle.
The benchmark Philippine Stock Exchange index (PSEi) dropped by 0.68% or 43.43 points to close at 6,299.67, while the broader all shares index fell by 0.46% or 17.05 points to 3,687.86.
This was the PSEi’s worst finish in nearly seven months or since it ended at 6,299.05 on June 25, 2024.
“The local market continued to decline as investors maintained a cautious stance while waiting for fresh leads. Investors are primarily waiting for the US’ December 2024 inflation rate, which could provide clues on the Federal Reserve’s policy outlook,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
December US producer price index data was set to be released overnight, while the consumer inflation report will come out late on Wednesday.
Tuesday’s close put the PSEi near bear territory, which is a decline of at least 20% from its recent peak. The bellwether index reached 7,604.61 intraday before closing at 7,554.68 on Oct. 7, its highest close last year.
“At 6,299.67, we are 17.16% down from the 7,604.61 peak,” Mr. Tantiangco noted.
“We’re still seeing the market pricing in the likelihood of a more hawkish Fed and buyers are still hesitant to step in and support prices ahead of tomorrow’s inflation report from the US,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.
First Metro Investment Corp. Head of Research Cristina S. Ulang likewise said in a Viber message that expectations that the Fed will not cut rates in its policy meeting later this month are putting pressure on Philippine stocks.
“Bonds and equities are on correction mode in the US, resulting in a negative backdrop for the local market,” Ms. Ulang said.
The majority of sectoral indices closed lower on Tuesday. Industrials sank by 1.56% or 142.20 points to 8,948.42; financials dropped by 0.85% or 18.49 points to 2,152.36; services retreated by 0.62% or 13.07 points to 2,071.38; and holding firms went down by 0.29% or 15.89 points to 5,331.96.
Meanwhile, mining and oil rose by 1.03% or 80.24 points to 7,816.50 and property went up by 0.11% or 2.54 points to 2,310.74.
Value turnover climbed to P5.75 billion on Tuesday with 705.91 million shares exchanged from the P4.96 billion with 806.77 million issues traded on Monday.
Market breadth was negative as decliners outnumbered advancers, 114 versus 68, while 60 names closed Tuesday’s session unchanged.
Net foreign selling rose to P886.66 million on Tuesday from P696.26 million on Monday. — Revin Mikhael D. Ochave