Stocks close lower ahead of Fed meeting results

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Philippine equities dipped on Tuesday following flat trade to open the week as investors awaited the results of the US Federal Reserve’s open market committee (FOMC) meeting.

The Philippine Stock Exchange index (PSEi) dropped below 7,100 points with the 0.52-percent decline recorded on Tuesday, losing 36.80 points to close at 7,066.74.

Likewise, the wider All Shares index decreased 0.43 percent or 17.92 points to 4,167.22.

Investors globally are sitting on the sidelines, still anticipating the results of the FOMC meeting, which will determine whether or not the Fed will continue its quantitative easing (QE) bond buying program.


Under the QE program, the Fed has been allotting billions of dollars to purchase government bonds monthly to keep interest rates at all time lows and stimulate lending.

The program has been favorable to global rates, as well as equities markets.

Astro del Castillo, managing director of First Grade Finance Inc., said in a phone interview that investors remained cautious on the Fed decision regarding the QE program, therefore staying at the sidelines in Tuesday’s trading session.

“Investors remained at the sidelines again, opting to wait for the Fed decision whether they will continue with their bond buying program, the QE program or not,” del Castillo said.

“Until the conclusion of the meetings on Thursday, the market will still remain in a sideways trend,” he added.

Despite the initial releases of third quarter corporate earnings this week, del Castillo said that the primary concern of the market is still towards the Fed action moving forward with the bond buying program or not, as it “will affect financial markets globally.”

“Until then, the local market is still seen to trade within the 7,000 to 7,100-point range,” he said.

The sectoral indices all ended in the red on Tuesday, led by the property counter, which declined 1.06 percent or 29.15 points to 2,708.32. Financials dipped 0.03 percent or 0.51 points to 1,650.63; industrials edged down 0.20 percent or 23.26 points to 11,417.13; holding firms decreased 0.62 percent or 37.77 points to 6,103.21; services went down 0.43 percent or 9.52 points to 2,181.74; and mining and oil slipped 0.55 percent or 86.51 points to 15,522.01.

Among the 10 most active companies, only Island Information and Technology Inc., SM Investments Corp. and Vista Land & Lifescapes Inc. advanced. The rest were decliners, which included PLDT, Universal Robina Corp., GT Capital Holdings Inc. and Ayala Corp.

Total shares traded amounted to 11.77 billion, valued at P6.03 billion. Losers outnumbered gainers, 97 to 69, while 47 shares were unchanged.

On Monday, the main PSEi ended flat with a 0.0001-percent dip or 0.01 point to 7,103.54, while the broader All Shares went down 0.26 percent or 10.73 points to 4,185.14.

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