Shares decline anew ahead of MSCI rebalancing

By Denise A. Valdez, Reporter

PHILIPPINE STOCKS closed lower on Wednesday as investors await the announcement of Morgan Stanley Capital International’s (MSCI) rebalancing.

The bellwether Philippine Stock Exchange index (PSEi) fell 56.30 points or 0.75% to end at 7,383.10 yesterday, as the broader all shares index dropped 34.59 points or 0.78% to close the session at 4,355.46.

“With the Fed Chairman less dovish but also citing risks from the virus, plus upcoming announcement of the MSCI rebalancing, investors sold during the Wednesday session,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

MSCI is set to release the results of its quarterly index review late Wednesday, Philippine time, which investors worldwide are expected to use as measure of activity in global equities.

Mr. Limlingan said as the announcement on the rebalancing is coming in a few hours, investors held a selling stance that subdued the PSEi during Wednesday’s session.

Apart from this, investors also reacted to the US Federal Reserve System’s worries over the economic impact of the novel coronavirus outbreak. Mr. Limlingan said while Fed Chairman Jerome Powell maintained the US economy is “in a very good place,” it still weighed that he said the virus may “lead to disruptions in China that spill over to the rest of the global economy.”

At Wall Street, the Dow Jones Industrial Average index closed flat during Tuesday’s session, while the S&P 500 and the Nasdaq Composite indices inched up 0.17% and 0.11%, respectively.

In Asia, markets mostly ended on green territory at the close of Wednesday’s trading. Japan’s Nikkei 225 index gained 0.74%, China’s Shanghai Shenzhen CSI 300 index added 0.81%, Australia’s S&P/ASX 200 index grew 0.47% and South Korea’s Kospi index rose 0.69%.

Meanwhile, all sectoral indices back home ended lower on Wednesday. Industrials slumped 154.04 points or 1.67% to 9,063.65; services lost 20.65 points or 1.39% to 1,456.86; mining and oil dropped 83.23 points or 1.15% to 7,132.70; holding firms lost 44.70 points or 0.62% to 7,068.29; property declined 22.28 points or 0.54% to 4,032.48; and financials slipped 3.12 points or 0.17% to end yesterday’s trading session at 1,755.82.

Value turnover on Wednesday stood at P6.07 billion with 1.31 billion issues switching hands, higher compared to Tuesday’s 1.30 billion issues valued at P4.48 billion.

Declining names outpaced those that gained, 122 against 63, while 51 names ended unchanged.

Offshore investors returned to buying shares, with net foreign inflows logged at P241.31 million yesterday from Tuesday’s net selling worth P80.91 million.