Shares snap four-day climb before US CPI data

Philippine shares ended their four-day rally on Wednesday due to weak data and as investors turned cautious before the release of the August US consumer price index (CPI) report overnight.

The benchmark Philippine Stock Exchange index (PSEi) fell by 0.56% or 39.75 points to end at 6,944.88, while the broader all shares index dropped by 0.53% or 20.09 points to close at 3,766.21.

“The local market succumbed to selling pressure this Wednesday after four days of rallying. Investors digested the widening of the Philippines’ balance of trade in goods deficit last July amid a tepid export performance, and the drop in its June foreign direct investment (FDI) net inflows,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

The country’s trade-in-goods balance, or the difference between exports and imports, stood at a USD 4.87-billion deficit in July, wider by 18.05% from the USD 4.12-billion gap a year ago, according to preliminary data from the Philippine Statistics Authority. This was the widest monthly deficit since USD 5.02 billion in March 2023.

Meanwhile, FDI net inflows fell by 29% to USD 394 million in June from USD 555 million in the same period a year ago, preliminary data from the Bangko Sentral ng Pilipinas showed. This was the lowest monthly level seen in more than four years or since the USD 314 million recorded in April 2020.

“Philippine shares finally closed in the red after successive session of closing higher as investors collectively held their breath before the latest US CPI data,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“US stocks ended mixed as investors awaited August’s consumer price index report on Wednesday and the producer price index on Thursday, both key to the Federal Reserve’s September rate decision. A rate cut is expected to ease economic concerns,” he added.

On Tuesday, the Dow Jones Industrial Average fell 92.63 points or 0.23% to 40,736.96; the S&P 500 climbed by 24.47 points or 0.45% to 5,495.52; and the Nasdaq Composite went up by 141.28 points or 0.84% to 17,025.88.

Back home, almost all sectoral indices closed lower on Wednesday. Property dropped by 2.49% or 71.28 points to 2,790.71; mining and oil declined by 1.1% or 87.27 points to 7,804.62; industrials went down by 0.4% or 37.95 points to 9,242.72; financials retreated by 0.36% or 7.86 points to 2,145.06; and holding firms decreased by 0.17% or 10.18 points to 5,807.33.

Services was the lone gainer, inching up by 0.02 points to end at 2,220.21.

Value turnover rose to PHP 8.02 billion on Wednesday with 926.84 million shares changing hands from the PHP 7.26 billion with 776.85 million shares traded on Tuesday.

Decliners outnumbered advancers, 131 versus 66, while 47 names closed unchanged.

Net foreign buying went down to PHP 340.59 million on Wednesday from PHP 759.26 million on Tuesday. — Revin Mikhael D. Ochave