Stocks succumb to profit taking

MANILA, Philippines — Share prices fell yesterday, ending seven straight sessions in the green, as investors remained cautious and took profits ahead of a widely expected rate hike by the Bangko Sentral ng Pilipinas (BSP).

The benchmark Philippine Stock Exchange index (PSEi) finished at 6,818.99, down by 31.65 points or 0.46 percent, while the broader All Shares index slipped by 5.20 points or 0.14 percent to close at 3,619.88.

“Philippine shares finally succumbed to profit taking after successive sessions of bargain hunting and ahead of the release of July retail sales data in the US. The latter is being used by investors to gauge how consumers are managing the impact of rising inflation and oil prices,” Regina Capital said in a note.

Total value turnover reached P8 billion. Market breadth, however, was positive with 117 advancers as against 94 decliners, while 34 issues were unchanged.

The BSP is expected to follow its July surprise rate hike with a half-point rise today and another quarter-point hike next month to catch up with its peers in containing soaring inflation, a Reuters poll showed.

Analysts at ING, DBS, OCBC and Mizuho Bank expect a 50-basis-point hike to its key overnight borrowing rate to contain inflation which is hovering near four-year highs.

BSP Governor Felipe Medalla said in an EJAP-SMC economic forum yesterday the central bank was “ready to take the necessary policy actions” to combat inflation, and added that current policy settings remain supportive of economic growth.

Meanwhile, Asian shares were mostly higher yesterday as regional markets looked to strong economic signs out of the US and China as drivers of growth.

“Expectations of economic growth in China and the US will likely remain key to gauging recession fears. China’s ‘zero-COVID’ policy is still an important headwind for global growth,” said Anderson Alves at ActivTrades.

The market’s latest gyrations came as traders cautiously reviewed mostly encouraging financial results from major retailers.