PSEi drops in cautious trade before inflation data

Shares dropped on Wednesday as the market stayed on the sidelines ahead of the release of September inflation data, which could affect the Bangko Sentral ng Pilipinas’ (BSP) next policy decision.

The benchmark Philippine Stock Exchange index (PSEi) went down by 7.79 points or 0.12% to end at 6,298.20 on Wednesday, while the broader all shares index dropped by 7.06 points or 0.2% to 3,398.56.

“Many were on the sidelines, with the market value turnover registering at PHP 4.68 billion. Investors were waiting for inflation as this would be crucial data for the decision of the Bangko Sentral ng Pilipinas regarding the interest rates,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

Value turnover went down to PHP 4.68 billion on Wednesday with 733.61 million shares changing hands from the PHP 5.94 billion with 858.83 million shares seen on Tuesday.

The market traded sideways before the release of September inflation data on Thursday, Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

“Perhaps they want to see the actual figure before taking any positions in the market,” he said.

A BusinessWorld poll of 17 analysts yielded a median estimate of 5.4% for September inflation, near the low end of the 5.3-6.1% forecast of the BSP for the month.

If realized, September inflation would faster than the 5.3% print in August but would be lower than the 6.9% in the same month in 2022.

This would also mark the 18^th straight month that inflation exceeded the BSP’s 2-4% annual target.

Shares closed lower after US job openings data indicated the labor market is still strong and bond yields marched higher, Mr. Limlingan added.

US job openings unexpectedly increased in August amid a surge in demand for workers in the professional and business services sector, pointing to a still-tight labor market that could compel the US Federal Reserve to raise interest rates next month, Reuters reported.

Job openings, a measure of labor demand, were up 690,000 to 9.610 million on the last day of August. That was the most in just over two years. Data for July was revised higher to show 8.920 million job openings instead of the previously reported 8.827 million. Economists polled by Reuters had forecast 8.800 million job openings in August.

Almost all sectoral indices dropped. Mining and oil fell by 302.40 points or 2.72% to 10,786.26; industrials dropped by 37.74 points or 0.41% to 8,986.73;  financials decreased by 4.98 points or 0.27% to 1,839.69; holding firms went down by 13.68 points or 0.22% to 5,981.62; and services slipped by 1.78 points or 0.11% to 1,515.67.

Meanwhile, property rose by 21.17 points or 0.81% to 2,619.15.

Decliners outnumbered advancers, 111 versus 72, while 53 shares closed unchanged.

Net foreign selling dropped to PHP 669.83 million on Wednesday from PHP 881.06 million on Tuesday. — SJT with Reuters