Stocks decline as foreign investors sell holdings

STOCKS tumbled on Thursday as foreign investors reversed their buying position, alongside the US Federal Reserve’s decision to keep rates unchanged.

The bellwether Philippine Stock Exchange (PSEi) index gave up 1% or 78.67 points to close at 7,759.55. The all- shares index likewise slumped 0.74% or 34.84 points to 4,644.68.

“It was a sell-on-news type of session after the FOMC (Federal Open Market Committee) reaffirmed a gradual hike and driving the risk appetite as the 10-year US treasury yield went above 3%,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a text message yesterday.

At the same time, foreign investors snapped their six-day buying position, with net sales reaching P241.70 million versus the P324.41 million recorded on Wednesday.

At the close of its two-day policy meeting on Wednesday, the Fed said it decided to keep rates steady, but signaled at increases in following meetings.

“No changes to rates as expected but there is some changes to the tone of the post-meeting statement. The description of recent economic developments was more upbeat, in line with recent data. In particular, the characterization of growth in economic activity was upgraded from “solid” to “strong,” as growth in household spending picked up “strongly,” Mr. Limlingan added.

Analysts expect the Fed to hike rates during its September and December meetings.

Wall Street indices ended mixed following the Fed’s announcement, with the Dow Jones Industrial Average dropping 0.32% or 81.37 points to 25,333.82. The S& P 500 index slipped 0.10% or 2.93 points to 2,813.36, while the Nasdaq Composite index added 0.46% or 35.50 points to 7,707.29.

Asian markets, meanwhile, ended in the red on Thursday, as US President Donald J. Trump threatened to intensify Washington’s trade war with China.

Back home, all sectoral indices incurred losses for the day, with the services sub- index leading losers with a decline of 1.22% or 18.61 points to 1,498.94. Holding firms fell 1.1% or 86.12 points to 7,746.14; industrials shed 0.86% or 94.90 points to 10,902.09; property dipped 0.68% or 26.29 points to 3,789.91; financials shed 0.49% or 9.24 points to 1,858.94; while mining and oil went down 0.21% or 22.32 points to 10,177.08.

Eagle Equities, Inc. President Joseph Y. Roxas, meanwhile, attributed the decrease to profit taking after the main index reached its high of three months and breached the 7,800 level on Wednesday.

Value turnover dropped to P4.93 billion yesterday from the P7.18 billion posted in the previous session after some 1.06 billion issues switched hands.

Decliners outpaced advancers, 120 to 76, while 46 issues remained unchanged.

Fourteen of the 20 most actively traded stocks declined, including JG Summit Holdings, Inc. ( down 2.62% to P55.80); Ayala Land, Inc. (down 1.67% to P41.25); and BDO Unibank, Inc. (down 0.95% to P135.50). •