Shares climb on expectations of slower inflation

Philippine stocks climbed on Wednesday after the Bangko Sentral ng Pilipinas (BSP) said that headline inflation may have eased further last month.

The Philippine Stock Exchange index (PSEi) rose by 0.3% or 22.49 points to close at 7,402.81 on Wednesday, while the broader all shares index gained 0.18% or 7.5 points to end at 3,970.86.

“The local market extended its climb this Wednesday. Investors bought into the market on the back of expectations that inflation last September further slowed down,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“The PSEi continued to rise after a huge slide to end the third quarter, supported by potential Federal Reserve rate cuts and optimism over further slowing inflation in September,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP’s month-ahead forecast showed that inflation likely settled within the 2-2.8% range in September. This would be slower than 3.3% in August and 6.1% in the same month a year ago.

A BusinessWorld poll of 15 analysts yielded a median estimate of 2.5% for the September consumer price index. This would be the slowest print in nearly four years or since 2.3% in October 2020.

The Philippine Statistics Authority will release September inflation data on Friday (Oct. 4).

“Philippine shares still managed to eke out gains despite rising Middle East tensions weighing on investor sentiment…,” Mr. Limlingan added.

The Israeli military said on Wednesday that regular infantry and armored units were joining ground operations in southern Lebanon, stepping up pressure on Hezbollah, as Israel prepared to retaliate against a barrage of Iranian missile strikes, Reuters reported.

Already battling Hamas in Gaza, Israel is beefing up its presence in south Lebanon in its conflict with Hezbollah a day after it was attacked by Iran, raising fears the oil-producing Middle East could be engulfed in a wider conflict.

Iran said on Wednesday its missile attack on Israel, its biggest military assault on the country, was over, barring further provocation, while Israel and the United States promised to hit back.

Back home, majority of sectoral indices ended higher. Mining and oil rose by 2.17% or 189.65 points to 8,917.41; services climbed by 1.35% or 30.42 points to 2,282.39; financials went up by 0.95% or 22.22 points to 2,352.92; and holding firms increased by 0.21% or 13.26 points to 6,271.14.

On the other hand, industrials fell by 0.7% or 68.41 points to 9,707.87, and property dropped by 0.11% or 3.52 points to 2,996.28.

Value turnover declined to PHP 4.33 billion on Wednesday with 1.16 billion issues changing hands from the PHP 6.04 billion with 1.13 billion shares traded on Tuesday.

Decliners beat advancers, 114 to 91, while 56 names were unchanged.

Net foreign buying increased to PHP 540.05 million on Wednesday from PHP 463.82 million on Tuesday. — Revin Mikhael D. Ochave with Reuters