PSEi sheds points on jitters over US Fed action
Philippine Stock Exchange (FILE PHOTO)
Expectations that the US Federal Reserve will cut interest rates by more than what was originally anticipated halted the local bourse’s two-day winning streak on Wednesday, with investors worrying about a possible economic weakness.
By the closing bell, the benchmark Philippine Stock Exchange Index (PSEi) shed 0.27 percent, or 19.46 points, to 7,155.90.
Meanwhile, the broader All Shares Index went down by 0.06 percent, or 2.21 points, to 3,847.96.
A total of 879.63 million shares worth P6.14 billion changed hands as foreigners made net purchases worth P773.84 million, stock exchange data showed.
Luis Limlingan, head of sales at stock brokerage house Regina Capital Development Corp., explained that traders were discouraged by the possibility of a 50-basis-point (bp) rate cut by the American central bank.
Article continues after this advertisementThe Fed was originally expected to ease its monetary policy by 25 bps, but experts abroad said it had room for a larger rate cut.
Article continues after this advertisement“Some investors are concerned that a larger-than-expected cut could indicate underlying economic weakness,” Limlingan said.
When a central bank eases interest rates, it is typically to spur economic activity, as lower rates mean lower borrowing costs for consumers. This move can be seen as a way to combat a weak economy.
International Container Terminal Services Inc. was the most actively traded stock as it declined by 0.25 percent to P404 per share.
It was followed by Ayala Corp., up 1.67 percent to P671; SM Investments Corp., down 0.52 percent to P965; DigiPlus Interactive Corp., down 6.73 percent to P18.56; and Ayala Land Inc., up 2.71 percent to P35.95.
Universal Robina Corp. was up by 3.07 percent to P97.50; Bank of the Philippine Islands, down 0.95 percent to P125.60; Security Bank Corp., up 6.08 percent to P82; SM Prime Holdings Inc., down 0.46 percent to P32.40; and BDO Unibank Inc., down 2.36 percent to P157.20 each.
Gainers overpowered losers, 125 to 68, while 60 companies closed unchanged.
