SHARES rebounded on Monday on last-minute buying, despite fears of an impending rate hike by the US Federal Reserve and a drop in Asian stocks following the coronavirus surge in China.
The benchmark Philippine Stock Exchange index (PSEi) gained by 22.24 points or 0.31% to close at 7,020.83 on Monday, while the broader all shares went up by 1.20 points or 0.03% to 3,722.80.
“Local shares inched up on Monday on last-minute buying. For most of the day, however, the market was in the negative territory as investors braced for the Federal Reserve’s policy decision next month wherein a 50-basis-point rate hike is anticipated,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a Viber message.
“The market traded in contrast with Asia-Pacific equities that declined sharply following a sell-off on Wall Street compounded by China’s difficulty in containing its worst outbreak of the virus despite harsh lockdowns in its largest city, Shanghai,” Mr. Cruz added.
“Philippine shares reversed losses from last Friday as investors continued to weigh the likelihood of a rate hike in May,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
Fed Chairman Jerome Powell has indicated that a half-point interest rate increase “will be on the table” when the Fed meets in May, Reuters reported.
Even the most dovish US central bankers are now calling for a key interest rate to hit its “neutral” level by year’s end to tame high inflation as the Federal Reserve appears headed for its swiftest shift in monetary policy since the 1960s.
Meanwhile, Asian stocks had their worst session in a month and a half on Monday as fears grew that Beijing was on the verge of joining Shanghai in lockdowns.
Shanghai authorities were reported to have erected fences outside residential buildings, sparking a fresh public outcry over a lockdown that has forced much of the city’s population of 25 million indoors.
Back home, the majority of the sectoral indices ended in the red except for holding firms, which climbed by 88 points or 1.34% to 6,646.20.
Meanwhile, mining and oil sank by 650.42 points or 5.13% to 12,009.33; financials dropped by 14.93 points or 0.88% to 1,670.44; industrials went down by 61.21 points or 0.64% to 9,363.91; services declined by 2.21 points or 0.11% to 1,954.88; and property gave up 0.51 point or 0.01% to 3,212.55.
The MidCap index retreated by 29.81 points or 2.52% to 1,152.46 and the Dividend Yield index lost 19.54 points or 1.17% to close at 1,657.59.
Value turnover decreased to P4.52 billion with 650.10 million shares changing hands from the P4.82 billion with 450.5 million issues seen the previous day.
Decliners overwhelmed advancers, 127 versus 54, while 47 names closed unchanged.
Net foreign selling fell to P370.58 million on Monday from the P646.16 million seen on Friday. — Luisa Maria Jacinta C. Jocson with Reuters