Expectations of a substantial US interest rate hike pulled down the benchmark Philippine Stock Exchange index for it to end the first trading day of the week at the 6,400 level after it slid by 111.35 points, down 1.7 percent to 6,437.42 from last week's closing.

Regionally, most awaited by Wall Street is the US Federal Reserve's September meeting on Wednesday, where the consensus expects a 75 basis points rate hike announcement. Aside from this, the National Association of Home Builders index is due for release, Housing Starts and Building permits are scheduled for release Tuesday, Existing home sales and the Federal Open Market Committee statement on Wednesday, initial jobless claims on Thursday, and Flash Purchasing Managers Index on Friday.

Back home, the Monetary Board is holding its 6th policy-setting meeting on 22 September, according to Regina Capital Development Corp. managing director Luis Limlingan said.

Philstocks Financial Inc. assistant manager for research and online engagement Claire Alviar said the market was affected by investors' anticipation of a possible aggressive policy rate hike in both the US Federal Reserve and the Bangko Sentral ng Pilipinas.

BoP gap worrying

"A wider balance of payments deficit expectation of the BSP weighed on sentiment as this may weaken the peso further. We are now seeing the support at 6,400 while the resistance is pegged at 6,600," Alviar said.

Upon closing on Monday, the PSEi net market value turnover stood at P4.48 billion. Foreigners were net sellers, amounting to P286.62 million.

All sectors were in the red led by the 2.67 percent decline in Holdings.

San Miguel Corporation was at the forefront, advancing 3.63 percnet. PLDT Inc., on the other hand, lost the most after it fell 5.14 percent.