PHL stocks climb as market awaits inflation data

LOCAL SHARES climbed on Tuesday amid strong corporate financial results and as investors await the US Federal Reserve’s policy decision and the release of April Philippine inflation data this week.

The benchmark Philippine Stock Exchange index (PSEi) went up by 47.61 points or 0.71% to close at 6,672.69 on Tuesday, while the broader all shares index rose by 14.16 points or 0.4% to 3,546.69.

“Philippine shares got off to another great start as investors have been cheering the local earnings trickling along with placing bets on the April CPI (consumer price index) coming on Friday,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Share prices moved higher after the long weekend break. Technically, momentum picked up after the PSEi managed to initially hold support at its 20-day exponential moving average… Fundamentally, investors are hopeful that the US FOMC (Federal Open Market Committee) may be at the tail end of its rate-raising actions. Investors are also hopeful that local April inflation will continue to trek lower,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

The market was closed on Monday for Labor Day.

Inflation likely further eased in April amid lower food prices, electricity rate cuts, and favorable base effects, analysts said.

A BusinessWorld poll of 14 analysts yielded a median estimate of 7% for April inflation, settling near the upper end of the 6.3-7.1% forecast range of the Bangko Sentral ng Pilipinas (BSP) for the month.

If realized, this would be slower than the 7.6% in March, but faster than the 4.9% in April 2022. This will also be the slowest in seven months, or since the 6.9% inflation rate in September last year.

However, it would surpass the BSP’s 2-4% target range for the 13th consecutive month.

April CPI data will be released on Friday.

Meanwhile, the Fed is holding its policy meeting on May 2-3.

Markets expect the US central bank to raise rates by another 25 basis points (bps) this week and are awaiting hints on their next policy moves.

The Fed has hiked borrowing costs by 475 bps since March 2022, with its target interest rate now at 4.75%-5%.

Sectoral indices were split on Tuesday. Holding firms climbed by 92.62 points or 1.44% to 6,498.41; property went up by 25.24 points or 0.92% to 2,760.73; and financials rose by 0.96 point or 0.05% to 1,919.09.

Meanwhile, mining and oil declined by 50.66 points or 0.47% to 10,535.88; industrials fell by 24.08 points or 0.25% to 9,481.81; and services dropped by 1.73 points or 0.1% to close at 1,603.47.

Value turnover declined to P4.08 billion on Tuesday with 1.17 billion shares changing hands, from the P8.34 billion with 899.96 million issues traded on Friday.

Advancers outnumbered decliners, 103 versus 83, while 48 names closed unchanged.

Net foreign buying fell to P67.1 million on Tuesday from P435.61 million on Friday. — A.H. Halili