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PSE index declines ahead of US inflation report

STOCKS closed lower on Tuesday, mirroring Wall Street’s decline, ahead of the release of December US consumer inflation data, which could give clues on the US Federal Reserve’s next policy move.

The benchmark Philippine Stock Exchange index (PSEi) lost 33.55 points or 0.49% to close at 6,756.69 on Tuesday, while the broader all shares index went down by 9.74 points or 0.27% to end at 3,559.23.

“Philippine shares closed slightly lower after the mixed start of the US, with the Nasdaq as the sole index that closed in the green,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Investors took comfort in the possibility that the Federal Reserve can slow the economy and bring down inflation without tipping the economy into a recession, and assumed a risk-on stance,” Mr. Limlingan added.

Philstocks Financial, Inc. Research Analyst Claire T. Alviar likewise said stocks dropped on Tuesday due to a lack of catalysts as investors wait for the US consumer price index report.

“Also, net foreign selling of P162.96 million weighed on the market. Investors also took profit near the 6,800 immediate resistance level. Our support remains at 6,600,” Ms. Alviar added.

Foreigners turned sellers on Tuesday with P162.96 million in net selling from P283.83 million net purchases seen the previous day.

Wall Street’s benchmark indexes gave up broad earlier gains to finish mixed ahead of an expected speech by Fed Chair Jerome Powell on Tuesday and inflation data on Thursday, Reuters reported.

A soft landing is the ideal Fed policy goal after raising interest rates, a situation in which inflation slows but there are not enough job losses to trigger a recession.

On Wall Street, the Dow Jones Industrial Average fell 112.96 points or 0.34% to 33,517.65; the S&P 500 lost 2.99 points or 0.08% to end at 3,892.09; and the Nasdaq Composite added 66.36 points or 0.63% to close at 10,635.65.

The Fed will hold its first policy meeting for the year on Jan. 31 to Feb. 1. It hiked rates by 425 basis points in 2022.

Back home, most sectoral indices closed lower on Tuesday except services, which went up by 13.23 points or 0.78% to 1,699.44.

Meanwhile, industrials dropped by 112.38 points or 1.16% to end at 9,570.53; property went down by 34.27 points or 1.13% to 2,986.24; financials decreased by 18.81 points or 1.09% to 1,704.57; mining and oil lost 87.78 points or 0.75% to end at 11,543.88; and holding firms inched down by 5.17 points or 0.07% to 6,595.16.

Decliners outnumbered advancers, 101 versus 86, while 51 names closed unchanged.

Value turnover surged to P20.64 billion on Tuesday with 2.51 billion shares changing hands from the P6.41 billion with 2.46 billion issues traded on Monday. — J.I.D. Tabile

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