PSEi declines on last-minute selling before US CPI

Philippine shares dropped on Wednesday due to last-minute selling as investors await the release of US consumer inflation data.

The Philippine Stock Exchange index (PSEi) went down by 10.11 points or 0.16% to end at 6,253.96 on Wednesday, while the broader all shares index rose by 1.82 points or 0.05% to 3,384.45.

“After spending much of the day in positive territory, the index closed lower again today due to a surge of market-on-close selling. Today’s initial strength could be tied to market optimism given overnight pronouncements from some US Fed officials indicating that US policy rates may have already peaked,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail on Wednesday.

Several Fed official have noted that recent rises in longer-term yields may help do their inflation-fighting work, Reuters reported.

Atlanta Fed President Raphael Bostic was applauded when he told a room full of bankers in Nashville on Tuesday: “I actually don’t think we need to increase rates anymore.”

“We think that selling pressure at the close was likely driven by continued risk aversion amongst investors as they chose to take profit and limit exposures ahead of key US data releases,” Mr. Mercado added.

September US consumer price index (CPI) data will be released on Oct. 12, Thursday.

In August, US CPI stood at 0.6% month on month and at 3.7% annually.

Seedbox Securities, Inc. Equity Trader Jayniel Carl S. Manuel said in an e-mail that a potential pause in US interest rate hikes “has introduced an element of unpredictability, influencing international capital flows and risk perception.”

The geopolitical conflict in the Middle East also affected market sentiment, Mr. Manuel added.

“The ongoing conflict in the Middle East between Israel and Hamas has injected geopolitical uncertainty into the equation, impacting investor sentiment and contributing to the market’s downward trajectory,” he added.

The majority of sectoral indices declined on Wednesday. Mining and oil fell by 90.25 points or 0.81% to 10,983.83; financials dropped by 10.88 points or 0.59% to 1,808.11; industrials went down by 37.93 points or 0.42% to 8,869.95; and services decreased by 1.47 points or 0.09% to 1,518.64.

Meanwhile, property rose by 5.83 points or 0.22% to 2,621.94 and holding firms climbed by 8.63 points or 0.14% to 5,942.97.

Value turnover went up to PHP 10.70 billion on Wednesday with 2.02 billion shares changing hands from the PHP 4.54 billion with 688.96 million shares seen on Tuesday.

Advancers outnumbered decliners, 100 versus 93, while 46 shares closed unchanged.

Net foreign selling went down to PHP 160.31 million on Wednesday from PHP 275.32 million on Tuesday. — SJT with Reuters