The stock market traded flat on Thursday ahead of the rebalancing of the Financial Times Stock Exchange (FTSE) and a central bank meeting that observers expect would result in policy rates being kept.
The bellwether Philippine Stock Exchange index (PSEi) dipped by 0.02 percent or 1.68 percent to close at its intraday high of 7,298.02 while the broader All Shares shed 0.004 percent or 0.16 points to finish at 4,350.29.
Philstocks Financial Inc. research associate Claire Alviar said profit taking again occurred as investors awaited the results of the Bangko Sentral ng Pilipinas’ (BSP) last meeting for 2020 on Thursday.
Local investors often anticipate whatever the outcome of such a meeting, which could guide or influence their trading decisions.
According to Alviar, traders cashed in amid strong psychological resistance at the 7,300 level and the main index’s overvaluation in terms of price-to-earnings ratio, which is around 21 times, higher than the five-year average of around 18 times.
“Last-minute bargain hunting did not save the bourse from the negative territory,” she said, “but losses were thinner” at the end of trading.
Net foreign selling of P739.83 million also contributed to the stock market’s performance, the analyst added.
Regina Capital Development Corp. Managing Director Luis Limlingan also cited the BSP meeting and the FTSE rebalancing for the bourse’s latest performance.
He said the central bank’s interest rates would be left untouched.
In its previous meeting last month, the BSP’s policymaking Monetary Board surprisingly cut overnight borrowing, lending and deposit rates by 25 basis points to a record-low 2.00 percent, 1.50 percent and 2.50 percent, respectively, to support the Philippine economy amid the lingering impact of the coronavirus pandemic.
The indices of most local sectors dropped, with property losing the most at 0.92 percent. Services and holding firms added 0.68 percent and 0.67 percent, respectively.
Total volume turnover was at 32.64 billion shares, valued at P9.26 billion.
Decliners outpaced advancers, 117 to 105, while 49 securities were unchanged.