PSEi up on lower US inflation, before BSP meeting

LOCAL shares closed higher on Wednesday on lower-than-expected US inflation in November ahead of more economic data releases.

The benchmark Philippine Stock Exchange index (PSEi) climbed by 32.69 points or 0.49% to close at 6,615.07 on Wednesday, while the broader all-shares index added 17.92 points or 0.52% to 3,449.57.

“Philippine shares rose once again, propped by a cooler-than-expected consumer price index (CPI) report,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

In November, US CPI recorded its smallest annual increase in nearly a year due to decreases in the costs of gasoline, healthcare, and used automobiles, Reuters reported.

In the 12 months through November, the US CPI climbed 7.1%, which was the smallest increase since December last year, and smaller than the 7.7% rise in October.

This showed a 0.1% increase last month, which is lower than the 0.4% jump in October.

“The PSEi moved sideways, closing at 6,615 points today, as investors prepare for upcoming key economic data this week,” Unicapital Securities, Inc. Equity Research Analyst Neil Andrew L. Maderaje said in a Viber message.

Mr. Maderaje said that the market will likely take cues from the press release of the US Federal Reserve, which will signal its stance moving forward.

“On the domestic front, the Bangko Sentral ng Pilipinas (BSP) will also have its Monetary Board meeting, hours after the scheduled announcement of the Fed’s rate hike decision,” Mr. Maderaje said.

Set to be released overnight, the Fed is expected to hike rates by just 50 basis points (bps) after its two-day policy meeting on Dec. 13-14, following four straight 75-bp increases.

Meanwhile, the BSP is set to hold its policy meeting on Thursday, where it is also expected to hike rates by 50 bps.

On Wednesday, most of the sectoral indices closed higher. Holding firms added 68.56 points or 1.08% to close at 6,402.91; financials increased by 7 points or 0.42% to 1,671.71; industrials rose by 32.73 points or 0.35% to 9,299.25; mining and oil went up by 30.95 points or 0.29% to 10,469.48; and services inched up by 3.58 points or 0.21% to close at 1,711.03.

Meanwhile, the property index was the sole loser, declining by 2.17 points or 0.07% to 2,880.65.

Value turnover surged to PHP 115.96 billion on Wednesday with 5.5 billion shares changing hands from PHP 5.42 billion with 705.24 million issues traded on Tuesday.

Advancers outnumbered decliners, 102 versus 73, while 37 names closed unchanged.

Net foreign selling went up to PHP 688. 71 million from the PHP 431.38 million seen the previous day.

Unicapital Securities’ Mr. Maderaje placed the PSEi’s support at 6,400 and resistance at 6,800. — Justine Irish D. Tabile