PSEi retreats as focus shifts to key data releases

PHILIPPINE SHARES retreated again on Thursday after ending in the green the past two sessions as cautious sentiment prevailed after the US Federal Reserve chief’s hawkish statement and before the release of key economic data next week.

The Philippine Stock Exchange index (PSEi) went down by 0.57% or 34.09 points to close at 5,929.68, while the broader all shares index fell by 0.33% or 11.93 points to end at 3,593.28.

“The market continued to tread water despite the US Federal Reserve rate cut after Fed Chairman Powell cautioned that there is a “growing chorus” amongst FOMC (Federal Open Market Committee) members to hold rates steady when they meet again in December,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

“Trading remained cautious, with markets closely monitoring commentary from Fed officials on the timing of potential additional easing,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The Fed cut interest rates on Wednesday by a quarter of a percentage point as expected, but the US central bank’s new policy statement included several references to the lack of official data during the ongoing federal government shutdown, and Fed Chair Jerome H. Powell told reporters later that policymakers are likely to become more cautious if it deprives them of further job and inflation reports, Reuters reported.

Those comments prompted traders to slash their forecasts for a 25-basis-point rate cut from the US central bank in December, which had been viewed as a near-certainty earlier. Fed funds futures now imply a 67.8% probability that the Fed will hold rates at its next meeting on Dec. 10, compared with a 9.1% chance on Wednesday, according to the CME Group’s FedWatch tool.

“The Philippine market slipped lower as selling pressure persisted throughout the session. Traders remained cautious as they are waiting for the release of gross domestic product and inflation data next week,” Mr. Limlingan added. The Philippine Statistics Authority is set to release the October inflation data on Nov. 5 (Wednesday), while the third-quarter GDP data will be released on Nov. 7 (Friday).

Most sectoral indices closed in the red on Thursday. Financials dropped by 0.99% or 19.71 points to 1,961.93; property fell by 0.72% or 15.75 points to 2,165.73; holding firms went down by 0.52% or 25.44 points to 4,819.45; industrials decreased by 0.3% or 26.88 points to 8,867.22; and services slipped by 0.15% or 3.55 points to 2,264.50.

Meanwhile, mining and oil rose by 0.98% or 124.63 points to 12,757.68.

Decliners outnumbered advancers, 95 to 82, while 64 names closed unchanged.

Value turnover dropped to P4.98 billion on Thursday with 660.39 million shares changing hands from Wednesday’s P6.46 billion with 690.95 million issues traded.

Net foreign selling went down to P354.32 million from P477.97 million. — Alexandria Grace C. Magno