Selling drives PSEi below key support level

Philippine stocks plunged on Tuesday as the benchmark Philippine Stock Exchange index (PSEi) pierced yet another key support zone ahead of the influential US Federal Reserve's interest rate-setting meeting this afternoon.

By the closing bell, the PSEi fell 2.55 percent, or 177.72 points, to 6,793.25 while the broader All Shares index retreated 1.90 percent, or 69.56 points, 3,590.40.

The selldown came as trading activity ramped up, with 1.5 billion shares valued at P11.27 billion changing hands while foreigners were net sellers to the tune of P812.43 million.

The PSEi fell below the 7,000 support zone on Monday before extending losses after breaking down below the 6,850 support area.

For financial analysts following technical indicators, such a breakdown was a warning of further declines in the near-term.

Jonathan Ravelas, a veteran stock market analyst and financial strategy consultant at e-Methods for Business Management Corp., said the selloff signaled the lack of conviction of market bulls.

"Profit taking ahead of the Fed meeting," Ravelas told the Inquirer. "The market's inability to stay above the 7,000 levels highlight those investors [with] no conviction trades [or] trades backed up by solid fundamentals."

He said investors were also worried about slower economic growth in 2023.

"For me, it was the hype of good [2022 gross domestic product] numbers. Buy the rumor, sell the fact. The slower [fourth quarter] GDP cast a shadow of a doubt on the strength of the recovery as inflation is still here," he said.

Meanwhile, Ayala Land Inc. was the top traded stock on Tuesday as it sank 5.64 percent to P29.30 per share.

It was followed by SM Investments Corp., down 1.08 percent to P920; BDO Unibank Inc., down 0.16 percent to P122.80; SM Prime Holdings Inc., down 2.12 percent to P36.90; and Jollibee Foods Corp., down 0.83 percent to P238 per share.

International Container Terminal Services Inc. was down 2.08 percent to P207.40; DMCI Holdings Inc., down 5.98 percent to P11; Union Bank of the Philippines, down 0.36 percent to P96.65; PLDT Inc., down 6.09 percent to P1,342; and Semirara Mining and Power Corp., down 3.03 percent to P32 per share.

—Miguel R. Camus INQ

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