PSEi declines as market awaits US inflation data
PHILIPPINE STOCKS dropped on Wednesday as investors awaited the release of November US inflation data, which could be considered in the US Federal Reserve’s rate decision next week.
The Philippine Stock Exchange index (PSEi) dropped by 1.22% or 82.11 points to close at 6,642.71, while the broader all shares index went down by 0.72% or 27.25 points to end at 3,758.55.
“The benchmark index fell below 6,700 as the peso weakened and investors stayed cautious ahead of the release of US November inflation figures, which could determine whether the Federal Reserve cuts its policy rate by another 25 bps (basis points) this month,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said.
The US consumer inflation report was set to be released overnight, while the producer price index data will come out on Thursday.
The Fed will hold its last policy review for this year on Dec. 17-18, where it is widely expected to continue its easing cycle. It is also set to give updated projections on the future path of interest rates in the world’s largest economy next week.
Jayniel Carl S. Manuel, equity trader at Seedbox Securities, Inc., said in a Facebook Messenger chat, said the market’s decline “suggests that investors are taking a more defensive stance amid a raft of new uncertainties.”
“Recent comments from global central banks, including potential further tightening by the US Federal Reserve, have rattled the emerging markets space, and the Philippines isn’t immune,” Mr. Manuel said. “Locally, participants are still digesting November inflation data and ongoing discussions around whether the Bangko Sentral ng Pilipinas may need to adopt a more assertive monetary policy if price pressures remain persistent.”
“Concerns about slowing global growth and the sustainability of corporate earnings as we approach yearend are also weighing on sentiment,” he added.
Most sectoral indices declined on Wednesday. Services sank by 2.37% or 50.32 points to 2,070.54; property dropped by 1.45% or 36.29 to 2,461.13; holding firms declined by 1.42% or 81.47 points to 5,649.28; mining and oil fell by 0.57% or 43.85 points to 7,543.67; and industrials decreased by 0.42% or 39.26 points to 9,167.17.
Meanwhile, financials rose by 0.21% or 4.76 points to 2,254.04.
Value turnover dropped to P5.23 billion on Wednesday with 905.03 million shares exchanged from the P8.54 billion with 783.54 million issues traded on Tuesday.
Decliners outnumbered advancers, 112 versus 80, while 55 names closed unchanged.
Net foreign selling stood at P497.83 million on Wednesday versus the P1.34 billion in net buying recorded on Tuesday.
“In the near term, investors will be closely monitoring key economic releases — both local and international — for any signs that inflation is easing or that the global economy might avoid a significant slowdown. Any positive developments on these fronts could help shift the narrative and reinvigorate risk appetite,” Mr. Manuel said. — Sheldeen Joy Talavera
