Index continues retreat for second straight day

MANILA, Philippines - Philippine stocks retreated for the second straight day as investors anticipate the possibility that the Bangko Sentral ng Pilipinas (BSP) will start hiking interest rates on Thursday.

At the Philippine Stock Exchange, the benchmarkt composite index declined 53.52 points to close at 6,704.93 on Tuesday.

Jose L. Vistan, head of research at AB Capital Securities Inc, said concerns over the violence in Iraq is putting pressure on oil prices, which would eventually cause an uptick domestic inflation as the Philippines is an importer of the fossil fuel.

All counters were in the red as losers beat gainers 131 to 53 with 35 stocks remaining flat.

About 1.575 billion shares changed hands worth P7.69 billion.

“All of these raise the possibility of an interest rate hike as the BSP would opt to be proactive in stemming inflation, which is putting pressure on corporate profits,” Vistan said.

Analysts had been saying the central bank is likely to raise key interest rates by 25 basis points this month as inflation is expected to hit five percent in the third quarter, which is at the higher end of its target range of three to five percent this year.

Most active stocks for the day were PLDT, Ayala Land, Banco de Oro, Metrobank and URC. Top gainers were Anchor Land, Bogo Medellin, Central Azucarera, Roxas & Co. and Swift Foods while top decliners wee Da Vinci Capital, Greenergy Holdings, Philippines Estates Corp., Vivant Corp. and Federal Resources.