Shares rise on bargain-hunting before Fed move
PHILIPPINE STOCKS closed higher on Tuesday as players picked up cheap stocks following the market’s two-day slide, but sentiment remained cautious before the US Federal Reserve’s policy decision.
The benchmark Philippine Stock Exchange index (PSEi) went up by 0.32% or 19.40 points to close at 5,953.16, while the broader all shares index rose by 0.21% or 7.78 points to 3,589.51.
“The Philippine market ended higher, driven by bargain-hunting after two consecutive days of strong selling. Investors remained cautious, closely monitoring upcoming earnings reports and the anticipated next move by the US Federal Reserve, which could influence market direction,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“The market snapped its losing streak, but the rebound of a third of a percent was unconvincing as investors await the Fed’s rate cut decision,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.
Fed policymakers are widely expected to reduce US short-term borrowing costs this week by a quarter of a percentage point for the second time this year as they look to prevent further slowing in the labor market, Reuters reported.
Odds are it won’t be the last of the series.
Climbing unemployment insurance claims suggest that labor market demand continues to cool, even as the government shutdown delays publication of most official economic statistics, including the unemployment rate, last estimated at 4.3% in August.
Milder-than-expected inflation readings, including last week’s report that the consumer price index rose 3% in the 12 months through September, have put worries of tariff-driven price pressures on the back burner.
A quarter-point rate cut on Wednesday at the close of the Fed’s two-day meeting would put the policy rate in the 3.75%-4% range. Financial markets are betting heavily on further rate cuts in both December and January.
Back home, sectoral indices closed mixed on Tuesday. Mining and oil slumped by 4.42% or 565.68 points to 12,230.69; industrials dropped by 0.27% or 24.08 points to 8,772.47; and property slipped by 0.01% or 0.39 point to 2,198.54.
“The mining sector counter was the biggest loser with a decline of 4.4% as gold prices continue to slump,” Mr. Garcia said.
Meanwhile, financials rose by 1.15% or 22.44 points to 1,970.64; services increased by 0.42% or 9.76 points to 2,282.42; and holding firms edged up by 0.05% or 2.43 points to 4,807.25.
Advancers narrowly beat decliners, 95 to 94, while 62 names closed unchanged.
Value turnover went down to P4.64 billion on Tuesday with 1.18 billion shares changing hands from Monday’s P18.77 billion with 11.82 billion issues traded.
Net foreign selling increased to P432.57 million from P313.66 million. — Alexandria Grace C. Magno with Reuters
