Market continues retreat ahead of central bank meetings

MANILA, Philippines — The benchmark Philippine Stock Exchange index (PSEi) plunged for a third consecutive session yesterday as investors stayed on the sidelines ahead of the much-awaited Bangko Sentral ng Pilipinas (BSP) and US Federal Reserve meetings this week.

The PSEi dropped by 76.60 points or 1.25 percent to close at 6,047.97, while the broader All Shares index declined by 34.94 points or 1.06 percent to settle at 3,274.30.

“The index fell to its lowest close in more than a year on concerns that rising oil prices and other inflationary pressures will force the BSP and Federal Reserve to keep policy rates elevated for longer,” China Bank Capital Corp. managing director Juan Paolo Colet said.

“Both central banks are widely expected to hold rates steady during their meetings this week, but growing uncertainty about the path of interest rates over the next several months has soured investor sentiment on local equities,” Colet said.

The US Federal Reserve is scheduled to hold its policy meeting from Sept. 19 to 20, while that of the Monetary Board will follow on Sept. 21.

Regina Capital’s Luis Limlingan said Philippine investors on Tuesday sold and kept to cash ahead of the Fed’s upcoming two-day policy meeting.

Claire Alviar of Philstocks Financial, meanwhile, said foreign investors continued to exit the market, posting a net selling of P566.33 million.

“The market remained weak, with a net market value turnover of P3.50 billion, as many investors stayed on the sidelines ahead of the Federal Reserve meeting,” Alviar said.

All local counters were in the red, with the property index suffering the biggest blow with a 2.18 percent drop.

Holding firms and industrial also recorded significant losses of 1.43 percent and 1.14 percent, respectively.

Market breadth remained negative as decliners whipped advancers, 128 to 62, while 43 stocks did not change.