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Shares slip ahead of US CPI data, Fed meeting

REUTERS

STOCKS inched lower on Tuesday as investors wait for the release of latest US consumer inflation data and the US Federal Reserve’s policy meeting, as these could affect the Bangko Sentral ng Pilipinas’ (BSP) decision this week.

The bellwether Philippine Stock Exchange index (PSEi) inched down by 2.82 points or 0.04% to close at 6,582.38 on Tuesday, while the broader all shares index lost 5.34 points or 0.15% to 3,431.65.

“The market was steady and on a wait-and-see as it tries to digest forthcoming US monthly inflation data and Fed policy hike, whether both will be above expectations at 7.3% and 50 bps (basis points), respectively, and which will sequentially partly determine the extent of next BSP policy hike and messaging,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said in a Viber message.

“The PSEi inched down … on profit taking after two consecutive days of gains. Investors also await the November US inflation report. Investors are waiting for the decision of the Federal Reserve on its interest rates to anticipate the next move of the Bangko Sentral ng Pilipinas at their meeting this month,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

The US Bureau of Labor Statistics was set to release November consumer price index data overnight, which markets expect to be a key consideration at the Fed’s policy meeting on Dec. 13-14.

The Fed is seen to hike rates by just 50 bps this week following four straight 75-bp increases.

Meanwhile, the BSP is set to hold its own policy meeting on Dec. 15, Thursday, where it is also expected to hike rates by 50 bps.

Ms. Alviar said data showing lower foreign direct investment (FDI) net inflows in September also weighed on sentiment.

Data released by the BSP on Monday showed FDI net inflows declined by 7.9% to $626 million in September from $680 in the same month in 2021.

For the first nine months of the year, FDI net inflows dropped by 10% to $6.7 billion from $7.5 billion in the comparable year-ago period.

Sectoral indices were split on Tuesday. Mining and oil lost 138.57 points or 1.31% to close at 10,438.53; holding firms decreased by 56.76 points or 0.88% to 6,334.35; and industrials went down by 17.13 points or 0.18% to 9,266.52.

Property rose by 28.07 points or 0.98% to 2,882.82; financials increased by 6.03 points or 0.36% to 1,664.71; and services added 2.77 points or 0.16% to end at 1,707.45.

Value turnover declined to P5.42 billion on Tuesday with 705.24 million shares changing hands from the P5.51 billion with 570.19 million issues traded on Monday.

Decliners outnumbered advancers, 113 to 68, while 43 names closed unchanged.

Net foreign selling dropped to P431.38 million from the P685.2 million seen the previous day.

FMIC’s Ms. Ulang placed the PSEi’s support at 6,500 and resistance at 6,900, while Philstocks Financial’s Ms. Alviar put support at 6,400 and resistance at 6,800. — J.I.D. Tabile

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