Main index slips as markets await Fed statement

THE MAIN INDEX lingered in negative territory on Wednesday as investors stayed on the sidelines amid the uncertainties surrounding US President Donald J. Trump’s economic policies and ahead of the results of the Federal Reserve’s policy review.

The Philippine Stock Exchange index (PSEi) dropped 2.21 points or 0.03% more to settle at 7,227.45. The all shares index, on the other hand, gained 1.70 points or 0.03% to close at 4,369.51.

“The positively spirited kickoff of the month’s trades quickly fizzled, with all gains returned and more even before traders broke for lunch as the weight of Trump’s recent comments and policy announcements introduced fresh uncertainties to an already wary marketplace,” Justino B. Calaycay, Jr., head of marketing and research at A&A Securities, Inc., said in a trading post.

The PSEi soared to 7,297.72 when the market opened and peaked at 7,300.21. The bellwether, however, eventually gave in and even touched an intraday low of 7,209.73.

“As the day progressed, the bears chipped off the lead, little by little, until eventually regaining the upper hand no more than 10 minutes into the day’s action. The bulls did try to fight back in the afternoon session, managing to push the benchmark briefly back to the green,” Mr. Calaycay said.

Still, market breadth was positive during the session, with 96 stocks advancing against 83 decliners and 54 closing steady.

The mining and oil sector led the pack, advancing 73.72 points or 0.61% to 12,152.57. Holding firms and industrials likewise ascended by 40.99 points or 0.55% to 7,416.23 and by 21.59 points or 0.19% to 10,990.56, respectively.

On the other hand, services declined by 10.68 points or 0.75% to 1,412.86; property by 15.42 points or 0.46% to 3,270.62; and financials by 6.68 points or 0.38% to 1,745.56.

“Investors continue to play it safe. Most prefer to stay in the sidelines given the uncertainties in the world market especially from the US side,” Astro C. del Castillo, managing director at First Grade Finance, Inc., said in a mobile phone message.

“Most funds prefer to wait for the FOMC (Federal Open Market Committee) announcement as this could dictate the pulse of the market,” Mr. Del Castillo added.

Investors only traded 1.10 billion issues valued at P5.11 billion during the session. The turnover remained below the P7- billion average and even declined from the P5.28 billion booked on Tuesday.

Foreign investors posted P566.43 million in net sales, adding adds to the P152.05-million net outflow seen the previous session.

“The narrative shifts back to a ‘market favorite’ — the US Federal Reserve’s FOMC meeting, its first for 2017. A statement on the results of the meeting is expected to be issued by 2 a.m. on Thursday,” Mr. Calaycay noted.

“Fortunately for us, the earnings cycle has already began, providing investors with something expectedly positive to chew on,” Mr. Calaycay added.