Stocks decline in thin trade ahead of key data

PHILIPPINE STOCKS dropped on Monday due to thin trading ahead of the month’s close and as investors await the release of economic data later this week and speeches of US Federal Reserve officials.

The bellwether Philippine Stock Exchange index (PSEi) went down by 7.14 points or 0.1% to close at 6,595.03 on Monday, while the broader all shares index declined by 2.65 points or 0.07% to end at 3,514.07.

“Philippine shares began the week quietly as investors begin to brace themselves for the quarter end window dressing this Friday. For the week ahead, many fund managers stateside will digest the core PCE (personal consumption expenditures) report on Friday,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Aside from this, there will be several speaking engagements from Fed officials throughout the week, including congressional testimony by Vice-Chair for Supervision Michael Barr on Tuesday and Wednesday and speeches by New York Fed President Williams and Fed Governor Waller on Friday. Back home, the Philippines’ budget balance as well as bank lending data are due out on the latter part of the week,” Mr. Limlingan added.

First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message that the market moved sideways due to a lack of catalysts.

“March inflation is yet to come out, which will decide whether a pause on rate hiking is viable. That will be the catalyst for a rally,” Ms. Ulang said.

Philippine inflation data for March will be released on April 5.

Headline inflation eased to 8.6% in February from the 14-year high of 8.7% in January.

For the first two months of the year, inflation averaged 8.6%, well above the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target and 6% forecast for the year.

The BSP’s policy-setting Monetary Board last week hiked benchmark interest rates by 25 basis points (bps) as inflation remains elevated, bringing its key rate to 6.25%.

Since May 2022, the central bank raised rates by a total of 425 bps. Its next rate-setting meeting is on May 18.

Almost all sectoral indices closed higher on Monday. Mining and oil increased by 36.95 points or 0.35% to 10,711.32; holding firms went up by 14.89 points or 0.23% to 6,436.27; industrials rose by 10.91 points or 0.11% to 9,552.63; and property climbed by 0.38 point or 0.01% to 2,782.40.

Meanwhile, services dropped by 16.67 points or 1.02% to 1,621.78 and financials fell by 2.65 points or 0.15% to end at 1,792.43.

Value turnover declined to P3.63 billion on Monday with 390.14 million shares changing hands from the P4.86 billion with 627.07 million issues traded on Friday.

Decliners narrowly outnumbered advancers, 87 versus 82, while 46 names closed unchanged. — A.H. Halili