Market eases ahead of US Fed meeting, higher oil prices

Share prices closed 0.1 percent lower yesterday as investors remained cautious due to higher oil prices and ahead of the US Federal Reserve policy meeting, dealers said.

They said another rise in US interest rates would come as no surprise, but investors were focused on the accompanying statement for an outlook of the US economy and whether the current rate cycle was nearing an end.

The composite index fell 2.36 points to 2,099.04 after moving between 2,097.24 and 2,108.97. The broader all-shares index retreated 0.80 point to 1,269.30.

Volume traded reached 368.9 million shares worth P865.9 million, about a third of which were cross transactions. Losers outnumbered gainers 35 to 26, while 51 stocks were steady.

"Some negative developments such as a (possible) tightening in interest rates and recent spike in oil prices are dissuading investors from buying stocks more aggressively," said Astro del Castillo of First Grade Holdings Inc.

Analysts warn that the central bank here could also raise its policy rates for the fourth time this year when it meets Thursday for its monthly policy meeting, a move that may hurt the fragile economy.

"There has been no clear indication from the central bank, and anything can happen considering that the monetary authority has recently made preemptive moves to prevent a sharper rise in inflation," del Castillo said.

Ayala Land was the most actively traded stock, closing unchanged at P9.90. Parent Ayala Corp. was also flat at P330.

Bank of the Philippine Islands led losers, down P1 at P56.

Globe Telecom was up P5 at P750 while rival Philippine Long Distance Telephone Co. (PLDT) erased initial gains to settle flat at P1,790.

San Miguel Corp’s A shares, available only to Filipinos, were unchanged at P64 while its B shares, available to foreigners, closed up P2 at P88.

The peso slid 0.1 percent to 53.688 per US dollar, marking a second straight decline since it reached a 29-month high on Friday. So far this year, the currency has been the best performer among 15 Asia-Pacific currencies tracked by Bloomberg.

The peso "is really due for a correction" and that would hurt investors based outside of the Philippines, said James Lago, head of research at Westlink Global Equities Inc. in Manila. The currency’s "sharp appreciation" has been driven by speculative funds, or "hot money," he added. – AFP