Stocks inch up on expectations of easing inflation

Philippine stocks inched up on Monday, tracking US shares’ performance on Friday, on expectations that Philippine headline inflation slowed anew in August.

The Philippine Stock Exchange index (PSEi) rose by 0.37% or 25.87 points to end at 6,923.41 on Monday, while the broader all shares index went up by 0.23% or 8.60 points to close at 3,751.41.

“The local market rose this Monday as expectations that inflation declined last August compared to July’s 4.4% drove market sentiment,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Investors also took cues from Wall Street’s positive performance in last week’s close,” he said.

Headline inflation likely eased in August and returned within the central bank’s 2-4% target band amid a drop in prices of rice and fuel, analysts said.

A BusinessWorld poll of 15 analysts yielded a median estimate of 3.7% for the August consumer price index, within the BSP’s 3.2%-4% forecast for the month.

If realized, this would be slower than the nine-month high of 4.4% in July, which also marked the first time since November 2023 that headline inflation exceeded the BSP’s 2-4% goal. This would also be below the 5.3% print recorded in August 2023.

Meanwhile, US markets closed higher on Friday. The Dow Jones Industrial Average Index improved by 0.55% or 228.03 points to 41,563.08; the S&P 500 Index surged by 1.01% or 56.44 points to 5,648.40; and the Nasdaq Composite Index climbed by 1.13% or 197.20 points to 17,713.63.

“Philippine shares got off to a lukewarm start for September despite several private and public institutions suspending work due to the heavy downpour,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Sentiment got a boost from the US as well, which saw their equity markets close in the green over the weekend,” Mr. Limlingan added.

Sectoral indices ended mixed on Monday. Holding firms climbed by 1.27% or 71.98 points to 5,738; services rose by 0.89% or 19.51 points to 2,200.74; and financials went up by 0.55% or 11.79 points to 2,122.42.

Meanwhile, mining and oil fell by 2.27% or 187.26 points to 8,039.58; property dropped by 0.97% or 27.62 points to 2,794.60; and industrials declined by 0.39% or 36.67 points to 9,310.71.

“JG Summit Holdings, Inc. led the market’s climb, jumping 3.62% to PHP 24.35. Wilcon Depot, Inc. was at the tail end, falling 3.51% to PHP 18.14,” Mr. Tantiangco said.

Value turnover dropped to PHP 4.89 billion on Monday with 555.41 million shares changing hands from the PHP 13.31 billion with 1.74 billion issues traded on Friday.

Advancers outnumbered decliners, 105 to 84, while 56 names closed unchanged.

Net foreign buying reached PHP 419.29 million on Monday versus the PHP 306.25 million in net selling recorded on Friday. — Revin Mikhael D. Ochave