Stocks fall on weak volume as market awaits leads

PHILIPPINE SHARES closed lower on Tuesday amid weak trading volume as investors look for fresh leads.

The Philippine Stock Exchange index (PSEi) declined by 41.71 points or 0.64% to 6,479.93 on Tuesday, while the broader all shares index went down by 16.86 points or 0.48% to close at 3,469.47.

“This Tuesday, the local market dropped 41.71 points (0.64%) to 6,479.93 despite the slowdown in the country’s inflation to 6.1% in May. The market heavyweight SM (SM Investments Corp.) dropped more than 2% in Tuesday’s session, which also dragged the index down,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“Many are still on the sidelines while waiting for a catalyst to emerge. As a result, market participation remained weak,” Mr. Plopenio added.

Shares in SM sank by 2.48% or P23 to close at P905 apiece on Tuesday.

Value turnover rose to P3.88 billion on Tuesday with 1.8 billion shares changing hands from the P3.36 billion with 1.7 million issues traded on Monday.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said investors sold shares as inflation eased as expected in May.

“With little impetus locally, movements were mainly influenced regionally by the news that regulators are contemplating increasing capital requirements for large banks,” Mr. Limlingan said in a Viber message.

Headline inflation slowed to 6.1% in May from 6.6% in April, preliminary data from the Philippine Statistics Authority showed. Still, this was faster than the 5.4% print in the same month a year ago.

The May print matched the 6.1% median in a BusinessWorld poll conducted last week. It was also within the 5.8-6.6% forecast of the Bangko Sentral ng Pilipinas (BSP) for the month.

For the first five months, headline inflation averaged 7.5%, still well above the BSP’s 2-4% target and 5.5% forecast for the year.

Meanwhile, US banks could face capital hikes of as much as 20% under new rules being prepared by US regulators as part of a global effort to harmonize capital requirements, a person familiar with the matter said on Monday, Reuters reported.

The proposal is expected to implement a final batch of global bank capital rules laid out by the Basel Committee of banking regulators that are due to take effect at the beginning of 2025.

The majority of sectoral indices went down on Tuesday, except for property, which rose by 24.75 points or 0.93% to 2,683.01, and mining and oil, which went up by 12.74 points or 0.12% to 10,061.91.

Meanwhile, holding firms fell by 86.26 points or 1.32% to 6,428.23; industrials decreased by 84.25 points or 0.9% to 9,249.77; financials went down by 13.97 points or 0.76% to 1,815.20; and services shed 1.31 points or 0.08% to close at 1,535.01.

Decliners outnumbered advancers, 109 versus 70, while 49 names closed unchanged.

Net foreign buying stood at P104.02 million on Tuesday versus the P108.35 million in net selling seen on Monday. — A.H. Halili with Reuters