SHARES continued to fall Monday ahead of the US Federal Reserve meeting and the release of Philippine inflation data.
The benchmark Philippine Stock Exchange (PSEi) index fell 10.17 points, or 0.15%, to 6,721.08, while the broader all-shares index fell 8.31 points, or 0.23%, to 3,596.83 .
“Philippine stocks remained in a downturn on Monday as investors continued their risk-off trading. The market was weak ahead of this week’s Fed meeting and local inflation data. The Fed is expected to hike rates by 50 basis points, but will base it on a larger rate hike through June as US inflation remains high,” Manny P. Cruz, equity strategist at Papa Securities Corp., said in a Viber message.
“In the local scene, inflation data for April is due this Thursday and the consensus stands at 4.6%, higher than the 4% ceiling set by monetary authorities,” added Mr. Cruz.
“Very low volumes in the exchange today ahead of tomorrow’s public holiday. In the near term, we have two key events with the Federal Reserve’s interest rate decision this Thursday and next week’s national election. I expect trading volume to remain low until these events pass,” William M. Cabangon, president of AAA Southeast Equities, Inc., said in a Viber message Monday.
Philippine financial markets will be closed Tuesday to comply with Eid’l Fitr.
Investors are expecting the Fed to hike rates by 50 basis points at its May 3-4 meeting, and the uncertainty lies in how hawkish Fed Chair Jerome Powell will sound in comments following the decision, Reuters reported .
Markets are pricing in an aggressive series of rate hikes from the Fed as it seeks to tame rising inflation amid the ongoing Russia-Ukraine crisis, ongoing lockdowns in China and rising global commodity prices.
In the meantime a business world a survey of 17 analysts gave a median estimate of 4.6% for inflation in April, in line with the central bank forecast’s midpoint of 4.2%-5% and beating its target of 2-4%.
Inflation data for April will be released on May 5th.
Most industry indices ended lower except for Industrials, which was up 97.28 points, or 1.06%, to 9,278.71.
Meanwhile, financials fell 19.03 points, or 1.18%, to 1,588.82; Services fell 12.59 points, or 0.66%, to 1,869.53; Mining & Oil slipped 49.05 points or 0.42% to close at 11,475.71; Real estate fell 4.97 points, or 0.16%, to 3,051.16; and holding companies declined 3.57 points, or 0.05%, to 6,338.
The MidCap Index was down 6.51 points, or 0.58%, to 1,114.79 and the Dividend Yield Index was down 4.82 points, or 0.30%, to close at 1,586.72.
Losers overwhelmed movers, 99 to 60, while 67 names ended unchanged.
Value turnover fell to P3.61 billion from P7.92 billion with 840.3 million issues the previous day, with 795.48 million shares changing hands on Monday.
Overseas net sales fell to P491.11 million from P1.68 billion on Friday. Luisa Maria Jacinta C. Jocson With Reuters