Shares up as US inflation report calms investors

Philippine shares rose on Thursday as US inflation data for June boosted sentiments ahead of the US Federal Reserve’s monetary policy decision.

The benchmark Philippine Stock Exchange index (PSEi) climbed by 111.64 points or 1.72% to 6,578.49 on Thursday, while the broader all shares index went up by 39.73 points or 1.14% to 3,497.06.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said in a Viber message that the market “staged a strong rally” across the board as investors cheered the better-than-expected US inflation print.

“Traders drove the index on bullish bets that the US rate hike cycle will peak at the Federal Reserve’s July meeting and that moderating consumer price pressures could pave the way for a dovish policy shift sooner than initially projected,” he said.

“With the index posting its highest close in more than a month, there is momentum for the market to test the 6,600 resistance zone that it last saw in May,” Mr. Colet added.

US consumer prices inched up by 0.2% in June after edging up 0.1% in May as inflation further subdues, but not fast enough to dissuade the Federal Reserve from resuming raising interest rates this month, Reuters reported

In the 12 months through June, the consumer price index (CPI) advanced by 3%. The latest figure marked the smallest year-on-year increase since March 2021 and followed a 4% rise in May.

Meanwhile, the US Federal Reserve paused its monetary tightening cycle in June after hiking its key rate by 500 basis points since March last year to a range between 5% and 5.25%.

The Federal Open Market Committee’s next meetings will be on July 25-26.

Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message that investors now await the release of the US Price Production Index’s final demand data for June after the slight rise in the US Inflation print.

He placed the consensus for the change in US producers’ selling prices at 0.2%.

“Moreover, initial jobless claims will be out today as well,” Mr. Limlingan added.

Back home, all sectoral indices closed higher on Thursday. Financials rose by 48.97 points or 2.6% to 1,927.34; mining and oil rose by 187.65 points or 1.9% to 10,036.76; holding firms jumped by 101.43 points or 1.6% to 6,423.62; industrials gained 136.63 points or 1.49% to 9,286.17; services went up by 13.26 points or 0.84% to 1,577.15; and property climbed by 21.45 points or 0.82% to end at 2,624.70.

Value turnover went up to PHP 6.04 billion on Thursday with 509.61 million shares changing hands from the PHP 5.25 billion with 734.94 million issues seen on Wednesday.

Advancers outnumbered decliners, 114 versus 69, while 48 names closed unchanged.

Net foreign buying declined to PHP 995.18 million on Thursday versus the P1.32 billion seen on Wednesday. — Adrian H. Halili with Reuters