PSEi dives toward 6,000 after BSP rate hike

Philippine stocks tumbled on Thursday, nearly breaching the 6,000 level as the Bangko Sentral ng Pilipinas’ (BSP) latest rate hike soured investor sentiment.

The benchmark Philippine Stock Exchange Index (PSEi) shed 2.16 percent or 132.65 points to close at a two-month low of 6,004.58.

Philstocks Financial Inc. said investors traded cautiously ahead of the BSP’s decision. It eventually raised the overnight reverse repurchase rate by 25 basis points to 5 percent.

The move added to bearish sentiment as higher interest rates are expected to further slow economic growth.

Luis Limlingan, head of sales at Regina Capital Development Corp., also said persistent selling pressure weighed on sentiment throughout the session.

Despite the selloff, trading activity was strong. Net value turnover reached P7.24 billion.

Foreign investors also contributed to the downward pressure, ending the session as net sellers with net outflows of P2.32 billion.

All sectoral indices finished in the red. Services suffered the steepest loss, falling 3.81 percent.

Among PSEi members, Ayala Land Inc. was the lone gainer, rising 1.95 percent to P15.50.

PLDT Inc. was the day’s worst-performing index stock after sliding 4.3 percent to P1,135.

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Ron Acoba, chief investment strategist at Trading Edge, said unless price pressures moderate more decisively, additional tightening cannot be ruled out.

“Without sufficient fiscal support from the government, higher borrowing costs could further weaken consumption, investment and credit demand, potentially constraining economic growth over the next several quarters,” Acoba said.

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