PSEi tumbles ahead of Fed decision

The local stock barometer pulled back on Tuesday as domestic investors pocketed gains ahead of the US Federal Reserve (Fed)’s monetary decision.

The main-share Philippine Stock Exchange index shed 72.35 points or 0.91 percent to close at 7,917.89, bucking the upswing in most regional markets as the local stock market reopened after a long holiday break.

“It looks like the market is Fed watching,” said Eagle Equities Inc. president Joseph Roxas. “Cautiousness is more as a force of habit than fear of actual rate hike.”

The Federal Open Market Committee is set to meet this June 13-14 for its monetary setting.

“We expect the FOMC to look through recent softness in inflation, job gains and wage growth, and to still hike its policy rate by 25 basis points. We see potential for a hawkish surprise as median dots are unlikely to move lower despite weak inflation, while new information regarding balance sheet reduction may be released,” Citi said in a research note.

At the local market, all counters were down led by the interest rate-sensitive property counter, which slumped by 2.47 percent while the industrial and services counters fell by over 1 percent.

Value turnover for the day amounted to P11.23 billion. Foreign investors, however, remained net buyers for the day amounting to P645.58 million.

There were nearly twice as many decliners (132) as advancers (68) while 43 stocks were unchanged.

The PSEi was weighed down most by Megaworld, which slid by 7.05 percent while Ayala Land and SM Prime fell by over 2 percent.

URC, PLDT, Ayala Corp., SM Investments and First Gen were all down by over 1 percent.

On the other hand, BDO and Metrobank also slipped.

Outside the PSEi, investors also sold down several second-liner stocks. Max’s fell by 9.65 percent while DoubleDragon declined by 2.94 percent.

Gaming stocks all tumbled as investors priced in a proposal in Congress to impose a P3,000 casino entrance fee. Melco tumbled by 8.02 percent while Bloomberry fell by 3.21 percent. PLC slipped by 0.63 percent.

On the other hand, GT Capital bucked the day’s downturn, gaining 3.51 percent. ICTSI also added 0.19 percent.