MANILA — Philippine equities retreated on Monday after a sharp late-session reversal erased early gains, pulling the benchmark index to a weekly low and underscoring a growing sense of caution ahead of a closely watched central bank policy meeting later this month.
By Alex Moreno
The benchmark Philippine Stock Exchange Index (PSEi) fell 41.75 points, or 0.65 percent, to close at 6,349.16. The decline capped a volatile trading day that began on a strong note, with the index rising as much as 1.7 percent to an intraday high of 6,458.79 following the release of government data showing the national unemployment rate held steady at 4.4 percent in December.
The abrupt reversal highlighted the fragile footing of the local equity rally, as investors shifted from early optimism toward profit-taking and defensive positioning. Analysts said the move reflected a broader reassessment of risk across Southeast Asian markets, where encouraging domestic indicators are increasingly being tempered by uncertainty over the future path of global interest rates.
“The market opened strong on the labor data, but that enthusiasm faded quickly,” one trader said. “Investors are clearly reluctant to chase prices higher with so many key events coming up.”
The sell-off came as investors adopted a “wait-and-see” stance ahead of the February 19 policy meeting of the Bangko Sentral ng Pilipinas, where expectations are building for a possible 25-basis-point cut in benchmark interest rates. While easing policy could provide support for equities over the medium term, traders appear wary of positioning aggressively before receiving clearer guidance from policymakers.
Market participants also pointed to technical factors behind the afternoon downturn. After the index failed to sustain levels near 6,450, selling pressure accelerated, triggering stop-loss orders and short-term corrections. This pushed the market back toward the lower end of its recent trading range, reinforcing the view that the PSEi remains in a consolidation phase rather than a sustained uptrend.
Adding to the pressure was a sizeable block sale involving roughly 9.7 million shares, valued at about 1.13 billion pesos, or $19.3 million. Analysts said the transaction likely amplified the afternoon decline by increasing supply at a time when overall market sentiment was already cautious.
Sectoral performance was mixed, underscoring the lack of broad-based conviction among investors. The mining and oil index emerged as the day’s standout performer, surging 4.7 percent amid selective buying in resource-linked stocks. In contrast, the services sector bore the brunt of the sell-off, sliding 3 percent.
International Container Terminal Services Inc., one of the index’s heavyweights, led the retreat in the services space, falling 4.7 percent. The stock has been under pressure in recent sessions as investors reassess valuation levels following its strong run last year. On the upside, GT Capital Holdings Inc. climbed 4.5 percent, making it the session’s top blue-chip gainer, while SM Investments Corp. added a modest 0.6 percent.
Trading activity picked up, with total value turnover rising to 6.75 billion pesos, higher than the previous session. Despite the market decline, foreign investors remained net buyers, though inflows slowed sharply to just 25.95 million pesos, compared with much stronger participation in recent days. The moderation suggests overseas investors are also exercising caution as global markets grapple with shifting expectations on monetary policy.
In the currency market, the Philippine peso showed relative resilience, ending the session at 58.455 against the U.S. dollar. The peso found support after data showed the country’s gross international reserves climbed to a 16-month high of $112.51 billion at the end of January.
Economists said the rise in reserves strengthens the central bank’s ability to manage exchange-rate volatility, particularly in an environment of heightened global uncertainty. A larger liquidity buffer gives policymakers more flexibility to smooth currency swings should capital flows become more volatile in response to external shocks.
For now, however, equities remain tethered to domestic concerns and near-term catalysts. With fourth-quarter corporate earnings season approaching its peak and the central bank decision looming, investors appear content to stay on the sidelines, waiting for clearer signals before committing fresh capital. Until then, market watchers expect continued volatility, with the index likely to trade within a narrow range as optimism and caution continue to wrestle for control of the bourse.©kuryentenews