Index ends flat ahead of US Fed meeting
Share prices closed flat yesterday as investors quickly locked in early gains ahead of the Federal Reserve’s decision on interest rates and a four-day break for the local market.
Philippine markets were closed for a public holiday on Monday, when many Asian markets staged record-shattering rallies on optimism about another rate cut by the Fed.
The US central bank will meet Tuesday and Wednesday and is widely expected to trim the federal funds rate by at least 25 basis points to contain the fallout from the troubled US housing sector.
It slashed the key rate by 50 basis points last month.
But local investors will be unable to react to the Fed’s decision immediately because Philippine markets will be closed again for public holidays on Thursday and Friday.
The composite index finished down 1.45 points at 3,783.43, after moving between 3,774.92 and 3,817.74.
The broader all-share index rose 6.35 points or 0.3 percent to 2,354.88.
There were 68 gainers and 48 decliners, while 54 stocks were steady.
A total of 4.1 billion shares valued at P5.3 billion changed hands.
“Although a rate cut by the Fed has not been fully priced in yet, many investors prefer to stay on the sidelines since we have a holiday-shortened trading week,” said Lawrence de Leon, an analyst at Accord Capital Equities.
Investors will also be looking for clues on whether the Fed will further trim interest rates.
“Tonight’s home price and consumer confidence data, and more importantly, this Friday’s jobs data will also need to be closely watched as to whether more rate cuts need to be considered in the future,” DBS Bank said in a note.
Philippine Long Distance Telephone Co. (PLDT) fell P55 or 1.8 percent to P3,015, extending its decline to a third consecutive session after rallying early this month to record highs.
PLDT rival Globe Telecom also extended its pullback from record levels, ending down P5 at P1,715. All other sectors finished in positive territory with mining and oil stocks outperforming.
“Investors prefer to position themselves in oil and mining stocks obviously because of rising prices of commodities,” said Nestor Aguila, president of DA Market Securities.
The mining and oil index jumped 2.6 percent, with index leader Philex Mining up 45 centavos or 4.6 percent to P10.25. — Technistock
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