Index snaps rally, ends below 6,600

MANILA, Philippines — Stocks halted a three-day rally as investors dumped shares yesterday due to the lack of encouraging economic developments as well as the index rebalancing at global benchmark MSCI.

The 30-company Philippine Stock Exchange index (PSEi) finished at 6,578.15, down by 97.31 points or 1.46 percent, while the broader All Shares index lost 40.53 points or 1.14 percent to close at 3,510.95.

Total value turnover reached P5.5 billion. Market breadth was negative, 105 to 62, while 54 issues were unchanged.

Juan Paolo Colet, managing director at China Bank Capital Corp., said the lack of positive surprises from this week’s macroeconomic data releases as well as news of the MSCI Philippines Index rebalancing prompted investors to dump shares and push the index below its 6,600 support level.

“The MSCI rebalancing announcement affected many index heavyweights, thereby amplifying the market’s slide. Investors likewise viewed the PSEi’s failure to sustain a breakout above 6,700 to 6,750 as a signal to take profits or cut losses,” he said.

Snack food giant Monde Nissin slipped 8.26 percent to P8.55 per share after MCSI said the stock would be removed from their Philippine index effective May 31. No other Philippine stock was removed from or added to the MSCI’s Philippine index.

Around Asia, markets were mixed as traders weighed a range of issues including US debt ceiling hopes, high-level talks between Washington and Beijing, banking sector uncertainty and more signs of a slowing economy.

Investors hoping the US Federal Reserve will finally take a breather from its long-running campaign of interest rate hikes have been left feeling a little more confident this week after data showed inflation on both a consumer and wholesale level continued to ease in April.

Their hopes were given a further boost Thursday by news that jobless claims last week hit their highest since October 2021, suggesting the labor market was showing some slack.

The Fed has long said it needed to see a softening in employment as well as a drop in inflation before it could consider ending its rate hike drive and look at a potential cut in borrowing costs.