Shares drop on profit taking ahead of BSP decision

shares drop on profit taking ahead of bsp decision - Shares drop on profit taking ahead of BSP decision

STOCKS dropped on Wednesday as investors booked profits after the shift to relaxed quarantine protocols and ahead of the central bank’s policy-setting meeting.

The benchmark Philippine Stock Exchange index (PSEi) fell 114.33 points or 1.85% to 6,042.12 while the broader all shares index retreated 44.42 points or 1.22% to 3,591.36.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a mobile phone message that the market declined after last-minute profit taking dragged the market to negative territory.

“Right after the optimism yesterday from the announcement of more relaxed quarantine measures, investors booked profits already, following some adjustments on the guidelines that have made it a little stricter; including but not limited to the suspension of operation of gyms and internet cafés,” Ms. Alviar said.

For Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan, the local market declined due to the upcoming decision of the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board on benchmark interest rates.

“Investors may have chosen to stay on the sidelines and wait for the decision to come out before they reposition on local stocks,” Mr. Pangan said in a mobile phone message.

The Monetary Board will hold its fourth policy-setting meeting for the year on Aug. 20. The BSP cut policy rates by 50 basis points (bps) in June, bringing the rates on its overnight reverse repurchase, deposit and lending facilities to 2.25%, 1.75% and 2.75%, respectively.

A BusinessWorld poll last week showed most economists expect the BSP to keep borrowing costs steady following signals from BSP Governor Benjamin E. Diokno.

All sectoral indices registered declines on Wednesday except for services, which rose 10.14 points or 0.69% to close the session at 1,460.20.

Meanwhile, property retreated 75.84 points or 2.54% to 2,905.21; holding firms went down 140.29 points or 2.19% to 6,261.18;  mining and oil declined 90.74 points or 1.53% to 5,820.56; financials dropped 16.90 points or 1.45% to 1,146.01; and industrials shrank 108.80 points or 1.37% to 7,819.44.

Decliners outpaced advancers, 95 to 92, while 42 names ended unchanged.

Value turnover stood at P5.47 billion with 1.36 billion shares changing hands, against Tuesday’s P5.96 billion on volume of 9.76 billion shares.

Net foreign selling amounted to P850.23 million on Wednesday, wider than the net P229.36 million that left the market in the previous session.

“Tomorrow (Thursday) being the last trading day of the week, we’ll have to see if the market manages to end above the 6,000 level for the second consecutive week, or if it fails to hold at this level,” Timson’s Mr. Pangan said. — Revin Mikhael D. Ochave

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