PSEi tracks Wall Street drop before US inflation

PHILIPPINE SHARES closed lower on Wednesday to track the decline on Wall Street as investors awaited the release of latest US consumer inflation data.

The bellwether Philippine Stock Exchange index (PSEi) declined by 72.41 points or 1.09% to end at 6,546.11 on Wednesday, while the broader all shares index fell by 34.04 points or 0.97% to close at 3,469.64.

“Philippine equities followed the sentiment of US markets, which closed lower as many await the latest inflation print. [On Thursday], analysts and fund managers will shift their focus to the US consumer price inflation report that is expected to show headline inflation rose 0.2% in December and 3.2% on an annual basis given the slight uptick in fuel and heating prices,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The US consumer price index (CPI) edged up 0.1% in November after being unchanged in October.

In the 12 months through November, the CPI increased 3.1% after rising 3.2% in October.

The S&P 500 and Dow lost ground and closed lower on Tuesday, pressured by a modest rise in Treasury yields as investors assessed the timing and size of any US Federal Reserve interest rate cuts in 2024 ahead of inflation data this week, Reuters reported.

Expectations the central bank could begin cutting rates as soon as March have been slowly decreasing, with CME’s FedWatch Tool showing a 65.7% chance for a cut of at least 25 basis points for the month, down from 79% a week ago.

The Dow Jones Industrial Average fell 157.85 points or 0.42% to 37,525.16. The S&P 500 lost 7.04 points or 0.15% at 4,756.50, and the Nasdaq Composite gained 13.94 points or 0.09% at 14,857.71.

A late move higher helped push the Nasdaq back into positive territory for the day.

“Meanwhile, oil prices experienced an uptick… [as] the market is weighing the concerns over Middle East tensions and worries about demand and increasing OPEC (Organization of the Petroleum Exporting Countries) supply,” Mr. Limlingan added.

Back home, almost all of the market’s sectoral indices ended lower on Wednesday, except for financials, which rose by 6.84 points or 0.38% to 1,793.44. 

Meanwhile, holding firms retreated by 117.17 points or 1.83% to 6,261.10; services decreased by 24.39 points or 1.48% to 1,615.17; industrials declined by 130.63 points or 1.42% to 9,068.98; mining and oil went down by 135.34 points or 1.4% to 9,484.68; and property dropped by 15.49 points or 0.53% to 2,882.53. 

Value turnover jumped to PHP 11.57 billion on Wednesday with 518.12 million issues switching hands from the PHP 5.75 billion with 405.37 million shares logged the prior trading day.

Decliners outnumbered advancers, 129 versus 59, while 37 names closed unchanged.

Net foreign buying dropped to PHP 557.38 million on Wednesday from PHP 915.94 million on Tuesday. — RMDO with Reuters