PSEi climbs as soft US data boost Fed pause bets

Philippine shares climbed on Wednesday following the release of soft US economic data, which could lead the US Federal Reserve to pause its tightening cycle again next month.

The Philippine Stock Exchange index (PSEi) went up by 70.29 points or 1.12% to close at 6,295.29 on Wednesday, while the broader all shares index rose by 27.57 points or 0.82% to end at 3,382.19.

“The PSEi continued to climb today as sentiment found a lift from the lower-than-expected US job openings and consumer confidence, reinforcing prospects of a tightening pause from the US Fed at their September meeting,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail on Wednesday.

“Sentiment was buoyed by the bigger than expected drop in US job openings and consumer confidence, with investors speculating that this could ease the pressure on the Federal Reserve to hike interest rates,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet likewise said in a Viber message.

US job openings dropped to a near two-and-a-half-year low last month amid a slowing labor market, which fanned bets that the Fed would keep borrowing costs steady in September.

The Job Openings and Labor Turnover Survey released on Tuesday showed job openings dropped by 338,000 to 8.827 million on the last day of July, the lowest since March 2021.

Meanwhile, a survey from the Conference Board showed consumers’ perceptions of the labor market cooled in August.

“Despite upbeat price action over the past two trading days, we remain wary of a possible uptick in volatility and selling pressure [on Thursday] given the upcoming effectivity date of the MSCI rebalancing (Sept. 1), and likely profit taking following the oversold rally,” Mr. Mercado said.

“The PSEi may try to move above 6,300 as part of the market’s current rebound from oversold conditions, but selling pressure is expected to build as we approach the major resistance at 6,375,” Mr. Colet added.

Most sectoral indices rose on Wednesday, except for property, which dropped by 0.10 point to 2,598.27.

Meanwhile, holding firms went up by 136.22 points or 2.32% to 5,998.92; industrials increased by 107.68 points or 1.23% to 8,858.97; financials jumped by 8.20 points or 0.44% to 1,855.93; mining and oil climbed by 33.51 points or 0.33% to 10,082.30; and services rose by 2.58 points or 0.16% to 1,532.27.

Value turnover went down to PHP 3.97 billion on Wednesday with 672.71 million shares changing hands from the PHP 5.63 billion with 395.06 million issues seen on Tuesday.

Advancers outnumbered decliners, 90 to 82, while 62 names closed unchanged.

Net foreign selling went up to PHP 375.70 million on Wednesday from PHP 219.17 million on Tuesday.

For the rest of the week, Mr. Mercado put the PSEi’s support at 6,150 and resistance at 6,370. — S.J. Talavera