Shares rise on dovish Fed bets ahead of CPI data
PHILIPPINE STOCKS went up on Monday, tracking US shares’ rise, on bets that the US Federal Reserve is done hiking rates and as investors await the release of August Philippine inflation data.
The Philippine Stock Exchange index (PSEi) went up by 33.62 points or 0.54% to close at 6,214.68 on Monday, while the broader all shares index rose by 14.47 points or 0.43% to end at 3,356.44.
“This increase was attributed to positive cues from Wall Street last Friday, where higher unemployment rates provided investors with optimism that the Federal Reserve might consider pausing its monetary tightening measures in response to the data,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
US stock indexes settled for a mixed close after a US jobs report showed an uptick in unemployment, cementing expectations that the Fed will let interest rates stand at its September meeting, Reuters reported.
The Dow Jones Industrial Average rose 115.80 points or 0.33% to 34,837.71; the S&P 500 gained 8.11 points or 0.18% to 4,515.77; and the Nasdaq Composite dropped 3.15 points or 0.02% to 14,031.81.
The Labor department’s payrolls report showed the US economy added more jobs than expected last month, but the rising unemployment and participation rates, along with a welcome cool-down in average hourly wage growth, solidified expectations that the Fed will let key interest rates stand this month.
“Philippine shares were bought up ahead of the local CPI (consumer price index) [on Tuesday], and as others started taking positions with the week ahead,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
A BusinessWorld poll of 18 analysts yielded a median estimate of 4.9% for August headline inflation, near the lower end of the central bank’s 4.8% to 5.6% forecast for the month.
If realized, this would be faster than the 4.7% print in July, but lower than the 6.3% seen in August 2022.
It would mark the 17th straight month of inflation exceeding the Bangko Sentral ng Pilipinas’ 2-4% target for the year.
Sectoral indices rose on Monday except for financials, which dropped by 3.07 points or 0.16% to 1,833.81.
Meanwhile, property rose by 37.70 points or 1.46% to 2,604.86; mining and oil went up by 136.43 points or 1.36% to 10,132.72; holding firms increased by 41.86 points or 0.71% to 5,910.55; services gained 4 points or 0.26% to end at 1,507.30; and industrials climbed by 23.13 points or 0.26% to 8,759.89.
Value turnover went down to P11.32 billion on Monday with 2.30 million shares changing hands from the P11.51 billion with 2.11 million issues seen on Friday.
Advancers outnumbered decliners, 94 to 82, while 42 names closed unchanged.
Net foreign selling went down to P1.20 billion on Monday from P5.69 billion on Friday. — SJT with Reuters
