PSEi tumbles on trade war, rate hike fears
The local stock barometer fell sharply in thin trade on Tuesday as investors were wary of the US-China trade war and the domestic damage cost by Typhoon “Ompong.”
The main-share Philippine Stock Exchange index (PSEi) slid by 101.44 points, or 1.37 percent to close at 7,332.17, weighed down by the interest rate-sensitive property counter.
The inflation-targeting Bangko Sentral ng Pilipinas (BSP) is expected to raise key interest rates during its upcoming monetary setting this Thursday, especially as inflation expectations have risen in the aftermath of Typhoon Ompong.
“In line with the PSEi closing only a few points from its previous breakdown point (now turned resistance level) of 7,478, some issues might hinder the index from having a solid (on high volume) breakout past this area in the coming days,” Papa Securities analyst Gio Perez said in a research note.
Perez noted indications of a bearish reversal in the US markets after the latest round of trade tariffs took effect alongside the retreat in the MSCI barometer for emerging markets.
“Second, total damage from Typhoon Ompong [is] now at P27 billion—a lot higher than the figures of P17 billion last week and [Agriculture] Seretary Emmanuel Piñol’s initial estimate of P11-P12 billion. This gives all the more credence to the generally accepted expectation that the BSP will raise [interest rates] by 50 basis points on Thursday, Sept. 27,” the research note said.
Papa Securities said it was best to scrutinize the gains in previous days as net foreign selling remained an ever-present factor.
On Tuesday, the property counter declined by 2.4 percent while the financial counter lost 1.85 percent. All other counters ended in negative territory.
Total value turnover for the day was thin at P3.5 billion. There were 99 decliners that edged out 81 advancers while 55 stocks were unchanged.
The PSEi was weighed down by Ayala Land and SM Prime, which lost 2.57 percent and 3.51 percent, respectively. Puregold tumbled by 4.03 percent while BPI declined by 3.63 percent.
SM Investments and Metrobank both fell by more than 2 percent, while PLDT, BDO and Globe all declined by over 1 percent.
Ayala Corp., Security Bank, Jollibee, Meralco and GT Capital also slipped.
On the other hand, JG Summit bucked the day’s downturn, rising by 2.57 percent. AEV added 1.69 percent while Metro Pacific firmed up by 0.41 percent.
