PSEi up on last-minute buying, positive sentiment

THE MAIN INDEX closed in the green on Wednesday on last-minute buying and improved market sentiment as inflation eased slightly in February.

The benchmark Philippine Stock Exchange index (PSEi) increased by 6.37 points or 0.09% to close at 6,711.49 on Wednesday, while the broader all shares index declined by 4.55 points or 0.12% to end at 3,585.66.

“The local bourse dodged a downturn on last-minute buying as investors weigh further the surprising cooling of Philippine inflation in February, which improved the odds of a 25-bp (basis point) BSP (Bangko Sentral ng Pilipinas) rate hike, against growing concerns over the Federal Reserve’s monetary policy,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

“Philippine equities managed to climb, still riding on the momentum of better-than-expected inflation print for February,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Headline inflation slowed to 8.6% in February from the 14-year high of 8.7% in January, which could lead to a smaller 25-bp hike from the BSP in its March 23 review.

“The PSEi managed to eke out gains in today’s session despite spending most of the day in the negative territory, given the surge of market-on-close buying,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail on Wednesday.

Mr. Mercado said local stocks barely moved due to negative sentiment in the market following hawkish remarks from US Federal Reserve chief Jerome H. Powell.

Mr. Powell told US lawmakers on Tuesday that the Fed will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control inflation, Reuters reported.

The Fed hiked its target interest rate by 25 bps at its Jan. 31 to Feb. 1 meeting to a range between 4.5% and 4.75%.

Its next policy meeting is on March 21-22.

Back home, sectoral indices were split on Wednesday. Mining and oil declined by 318.62 points or 2.85% to 10,831.60; property went down by 27.71 points or 0.95% to 2,867.55; and industrials dropped by 27.10 points or 0.27% to 9,697.79.

Financials went up by 19.03 points or 1.02% to 1,867.80; services climbed by 3.07 points or 0.18% to 1,647.96; and holding firms rose by 4.04 points or 0.06% to 6,411.19.

Value turnover declined to P5.46 billion on Wednesday with 870.39 million shares changing hands from the P5.5 billion with 1.82 billion issues traded on Tuesday.

Decliners outnumbered advancers, 120 versus 72, while 46 names closed unchanged.

Net foreign buying declined to P12.27 million on Wednesday from P127.75 million on Tuesday.

China Bank Securities’ Mr. Mercado placed the PSEi’s support at 6,640 and resistance at 6,740, while AP Securities’ Mr. Temporal put support at 6,500 and resistance at 6,800. — A.E.O. Jose