Main index declines anew ahead of BSP decision

STOCKS closed in negative territory again on Thursday, Feb. 8, as investors awaited the results of the local central bank’s first policy meeting for the year.

The bellwether Philippine Stock Exchange index (PSEi) dropped 0.25% or 22.48 points to finish at 8,645.08.

The broader all-shares index, meanwhile, posted a gain of 0.16% or 8.59 points to 5,094.67.

“I think investors opted to sell on strength after [Wednesday]’s rally. Considering that 8,550 was breached…, investors probably decided to cut losses for fear of another round of correction,” Garie G. Ouano, research director at Chinabank Securities Corp., said via text.

The market saw thinner trading as 1.03 billion issues valued at P7.11 billion switched hands. This is lower than the P9.08-billion turnover recorded on Wednesday.

“Value turnover was also below average so that could indicate that the market was on wait-and-see mode ahead of the BSP (Bangko Sentral ng Pilipinas)’s policy decision,” Mr. Ouano said.

“At their first meeting of the year, we expect the BSP to leave policy rates unchanged, keeping the overnight reverse [repurchase] rate at 3.00% and the overnight deposit rate at 2.50%. However, we see the risk that the BSP sounds meaningfully more hawkish than their meeting in December,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message ahead of the meeting’s close.

The BSP kept rates unchanged at Thursday’s meeting, it announced after the close of trading, on the back of robust economic prospects and expectations of a moderation in inflation.

Property was the lone sub-index that gained on Thursday, adding 0.20% or 7.92 points to 3,920.35.

The mining and oil counter led the day’s losers, giving up 0.98% or 115.06 points to 11,538.72, followed by industrials, which dropped 0.38% or 44.92 points to 11,712.34. Financials shed 0.31% or 7.02 points to 2,205.45; services dipped 0.16% or 2.74 points to 1,711.91; while holding firms moved 0.03% down or 2.83 points to 8,752.29.

Advancers trumped decliners, 107 to 92, while 60 issues remained unchanged.

Foreigners continued their selling spree on Thursday, with net outflows recorded at P556.30 million, slightly lower than the P598.98 million posted the day before.

Most Southeast Asian stock markets edged lower on Thursday, signaling caution, as Wall Street’s early gains overnight fizzled out, leaving investors wary of further volatility in the global markets.

US stocks ended lower on Wednesday as bond yields climbed higher, and the threat of rising inflation kept investors on edge over the prospect of more interest rate hikes.

In Asia trade, the S&P e-mini futures slid 0.30%, suggesting the likelihood of another uncertain session on Wall Street, while MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.10%. — Arra B. Francia with Reuters