PSEi inches up on dovish Fed ahead of US data

The benchmark index rose on Thursday, but last-minute selling trimmed gains as investors were cautious before the release of US inflation data and amid dovish comments from US Federal Reserve officials.

The Philippine Stock Exchange index (PSEi) went up by 9.10 points or 0.14% to end at 6,263.06 on Thursday. Meanwhile, the broader all shares index dropped by 1.04 points or 0.03% to 3,383.41.

“The trading session opened in the red before going green for the rest of the day. Heavy selling at the last minute trimmed gains before the session’s close as investors took caution ahead of the release of the US’ September inflation figures,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said.

September US consumer price index (CPI) data were set to be released overnight.

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

“Stocks inched upward as some Federal Reserve officials offered dovish remarks overnight. Some of these officials expressed the view that further rate hikes might not be necessary given that rates are already too high,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

Fed officials pointed to uncertainties around the economy, oil prices and financial markets as supporting “the case for proceeding carefully in determining the extent of additional policy firming that may be appropriate,” the minutes of its September meeting showed, Reuters reported.

“The market seems to be shrugging off recent BSP’s (Bangko Sentral ng Pilipinas) statements of a potential rate hike this November as this is likely priced in already following the hotter-than-expected Philippine inflation report last week,” Mr. Vistan.

BSP Governor Eli M. Remolona, Jr. on Wednesday said the Monetary Board is open to hiking borrowing costs by 25 bps in their Nov. 16 review following the release of data showing faster-than-expected September inflation.

The Monetary Board has kept the benchmark interest rate at 6.25% for four straight meetings after it hiked borrowing costs by 425 basis points from May 2022 to March 2023 to help tame inflation.

Most of the sectoral indices dropped on Thursday. Services fell by 2.86 points or 0.18% to 1,515.78; mining and oil declined by 18.85 points or 0.17% to 10,964.98; industrials slipped by 13.50 points or 0.15% to 8,856.45; and financials decreased by 1.64 points or 0.09% to 1,806.47.

Meanwhile, property rose by 20.87 points or 0.79% to 2,642.81 and holding firms went up by 16.03 points or 0.27% to 5,959.

Value turnover went down to PHP 3.21 billion on Thursday with 886.88 million shares changing hands from the PHP 10.70 billion with 2.02 billion issues on Wednesday.

Advancers narrowly outnumbered decliners, 89 versus 86, while 49 shares closed unchanged.

Net foreign buying stood at PHP 19.62 billion on Thursday versus the PHP 160.31 million in net selling on Wednesday. — SJT with Reuters