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Stocks slip on last-minute selling after BSP move

STOCKS dropped on Thursday on last-minute profit taking amid the Bangko Sentral ng Pilipinas’ (BSP) decision to hike borrowing costs anew.

The benchmark Philippine Stock Exchange index (PSEi) dropped by 6.18 points or 0.09% to close at 6,815.91 on Thursday, while the broader all shares index gained 2.90 points or 0.08 % to end at 3,639.08.

“The local market declined due to last-minute profit taking. Investors secured gains ahead of the Bangko Sentral ng Pilipinas’ monetary policy decision to avoid losses in case there will be hawkish statements from the central bank,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“The local bourse ended relatively flat as last-minute selling erased most of its early gains following the news of the BSP hiking rates by 50 basis points (bps),” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

The BSP’s policy-setting Monetary Board on Thursday raised benchmark interest rates by 50 bps for a second straight meeting after headline inflation surprised to the upside last month, indicating widening price pressures.

The latest increase brought the policy rate to 6%, the highest since August 2008. The BSP has now hiked borrowing costs by 400 bps since May 2022.

Inflation climbed 8.7% year on year in January, faster than 8.1% in December 2022. It was the 10th consecutive month that it exceeded the central bank’s 2-4% target range for the year.

“Philippine shares closed slightly lower even after a stronger-than-expected January retail sales report was released, which suggested that the Federal Reserve may have further to go in its efforts to tame inflation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan added in a Viber message.

US retail sales improved to 3% in January driven by motor vehicle sales and other goods.

The US central bank raised the fed funds rate by 25 bps earlier this month to a range between 4.5% and 4.75%, bringing cumulative hikes since March 2022 to 450 bps.

Back home, sectoral indices were split on Thursday. Mining and oil declined by 126.22 points or 1.11% to 11,222.48; financials went down by 16.95 points or 0.92% to 1,819.19; and services lost 0.22 point or 0.01% to end at 1,689.74.

Meanwhile, property went up by 9.53 points or 0.31% to 3,011.85; holding firms added 9.27 points or 0.14% to close at 6,539.44; and industrials gained 4.50 points or 0.04% to 9,879.04.

Value turnover went up to P12.23 billion on Thursday with 1.2 billion shares changing hands from the P5.26 billion with 1.09 billion issues traded on Wednesday.

Decliners outnumbered advancers, 102 versus 80, while 54 names closed unchanged.

Net foreign selling stood at P421.32 million on Thursday versus the P143.88 million in net foreign buying seen on Wednesday.

AP Securities’ Mr. Temporal placed the PSEi’s immediate support at 6,700 and resistance at 7,000. — Ashley Erika O. Jose

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