Stocks drop as market awaits Fed policy meeting

PHILIPPINE SHARES slipped on Tuesday on last-minute profit taking and as investors were cautious ahead of the US Federal Reserve’s policy meeting.

The Philippine Stock Exchange index (PSEi) dropped by 0.07% or 4.86 points to close at 6,848.43 on Tuesday, while the broader all shares index retreated by 0.12% or 4.41 points to end at 3,566.48.

“This Tuesday, the local market dropped by 4.86 points (-0.07%) to 6,848.43 due to lastminute profit-taking,” Philstocks Financial, Inc. Research and

Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“Investors seem to be cautious ahead of the Federal Reserve’s policy meeting given that the US producer price index (PPI) data last Friday was higher-thanexpected. This resulted in a sideways movement of the market for Tuesday’s session,” he added.

The Fed is meeting to review policy on March 19-20. Markets widely expect the US central bank to keep its target rate unchanged at 5.25-5.5% for a fifth straight meeting and maintain a hawkish tone as data released last week showed that inflation in the world’s largest economy remains sticky.

A report from the Labor department showed the PPI for final demand rose 0.6% in February after advancing 0.3% in January, Reuters reported. Economists had forecast the PPI would climb 0.3%.

In the 12 months through February, the PPI shot up 1.6% after advancing 1.0% in January. The report followed news that consumer prices increased strongly for a second straight month in February.

“Investors await guidance on monetary policy as the Federal Reserve starts its two-day meeting on Tuesday. Concerns arise from recent inflation reports, suggesting the central bank may signal prolonged higher interest rates,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Philippine shares softened ahead more economic data and the release of Nvidia’s inaugural AI (artificial intelligence) conference,” Mr. Limlingan added.

The majority of sectoral indices closed lower on Tuesday. Mining and oil declined by 1.31 points or 108.25 points to 8,111.38; holding firms went down by 1.16% or 76.12 points to 6,441.21; services retreated by 0.24% or 4.49 points to 1,808.91; and industrials inched down by 0.23% or 20.66 points to 8,832.92.

Meanwhile, property climbed by 1.73% or 47.99 points to 2,819.45, and financials rose by 0.21% or 4.36 points to 2,047.85.

“Among the index members, Converge ICT Solutions, Inc. was at the top, climbing 3.16% to

P9.14. Bloomberry Resorts Corp. lost the most, dropping 8.7% to P10.50,” Mr. Plopenio said.

Value turnover declined to P5.79 billion on Tuesday with 897.73 million issues switching hands from the P6.3 billion with 2.21 billion shares traded on Monday.

Decliners beat advancers, 114 versus 84, while 48 names closed unchanged.

Net foreign buying stood at P244.88 million versus the P23.73 million in net selling seen on Monday. —