Shares rebound with US inflation flat in October

PHILIPPINE SHARES rebounded on Wednesday, tracking the rise in Asian markets, following the release of data showing that US consumer inflation was flat last month.

The Philippine Stock Exchange index (PSEi) went up by 60.25 points or 0.98% to close at 6,171.13 on Wednesday, while the broader all shares index gained 21.44 points or 0.65% to end at 3,307.72.

“Following three consecutive days of market decline, the local bourse bounced… due to positive sentiment stemming from the slowdown in the US October inflation rate, providing hope among investors that the Federal Reserve might halt its interest rate hikes,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“The index rose in line with Asian bourses as the market drew strength from the lower-than-expected US October inflation print,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet likewise said in a Viber message.

Asian stocks surged to two-month highs on Wednesday in anticipation of stimulus in China and an end to rate hikes in the United States, while the dollar nursed steep losses suffered in the wake of a benign US inflation report, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 2.3% by the mid-session break in Hong Kong, hitting its highest since mid-September and on track for its largest daily gain since January.

US headline consumer prices were flat in October, against expectations for a 0.1% rise, data showed on Tuesday. Core consumer price index, at 0.2%, also came in below a forecast of 0.3%.

“Investors have also started to anticipate that the BSP (Bangko Sentral ng Pilipinas) will keep rates steady in its policy meeting on Thursday,” Mr. Colet added.

A BusinessWorld poll conducted last week showed 15 of 18 analysts expect the BSP’s policy-setting Monetary Board to keep benchmark interest rates unchanged this week.

On the other hand, three analysts see the BSP raising borrowing costs by 25 basis points (bps).

The BSP last month raised benchmark borrowing costs by 25 bps in an off-cycle move, bringing its policy rate to a 16-year high of 6.5%. The central bank has raised policy rates by 450 bps since May 2022.

Most sectoral indices rose on Wednesday. Property climbed by 38.90 points or 1.48% to 2,658.56; holding firms went up by 77.95 points or 1.32% to 5,954.40; services rose by 17.44 points or 1.18% to 1,484.29; mining and oil increased by 37 points or 0.38% to 9,543.52; and financials inched up by 6.46 points or 0.37% to 1,743.49.

Meanwhile, industrials dropped by 5.67 points or 0.06% to end at 8,567.08.

Value turnover went up to PHP 4.52 billion on Wednesday with 447.762 million shares changing hands from the PHP 2.87 billion with 361.55 million issues seen on Tuesday.

Decliners and advancers were split at 84 each, while 47 issues closed unchanged.

Net foreign selling went up to PHP 147.18 million on Wednesday from PHP 107.76 million on Tuesday. — S.J. Talavera