STOCKS slid on Wednesday ahead of the release of the June US Consumer Price Index (CPI) report, which is expected to give the Federal Reserve another reason to continue hiking rates aggressively.
The benchmark Philippine Stock Exchange index (PSEi) went down by 94.57 points or 1.48% to close at 6,255.37 on Tuesday, while the broader all shares index retreated by 35.34 points or 1.03% to 3,374.57.
“Philippine shares slid as investors braced for the June CPI report,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
Mr. Limlingan said the report due overnight likely showed that US inflation picked up further last month.
“The likely hot reading could prompt the Fed to hike another 75 bps (basis points) during this month’s meeting,” he said.
“Sentiment was also dragged as the US tumbled on Tuesday as worries over global economic growth dented investor appetite for risk assets and Wall Street braced for June inflation data. Investors appeared to favor traditional safe havens,” Mr. Limlingan added.
“The local bourse dropped… as the market digests the weakening peso while waiting for the US inflation rate,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“Almost all markets globally await the inflation print in the US as it will greatly influence the decision of the Federal Reserve regarding interest rates which will have a negative impact on almost all currencies once the US dollar gets stronger if the Fed will be more aggressive in monetary tightening,” Ms. Alviar added.
The peso rebounded on Wednesday, closing at P56.26 per dollar, rising by 11 centavos from its P56.37 finish on Tuesday, which was a near 18-year low.
Still, year to date, the local unit has weakened by 10.31% or by P5.26 from its close of P51 versus the dollar on Dec. 31, 2021.
The majority of sectoral indices ended in the red on Wednesday except for mining and oil, which climbed by 26.42 points or 0.23% to 11,122.59.
Meanwhile, holding firms dropped by 116.26 points or 1.95% to 5,826.17; property retreated by 55.24 points or 1.92% to 2,820.22; financials went down by 29.44 points or 1.92% to 1,496.64; services decreased by 9.91 points or 0.59% to 1,658.37; and industrials lost 14.21 points or 0.15% to end at 9,357.77.
Value turnover went up to P5.55 billion on Wednesday with 1.28 billion shares changing hands from the P4.19 billion with 955.85 million issues seen the previous trading day, PSE data showed.
Decliners outnumbered advancers, 139 versus 44, while 49 names closed unchanged.
Net foreign selling climbed to P706.88 million on Wednesday from the P323.17 million seen the previous trading day.
Regina Capital’s Mr. Limlingan placed the PSEi’s support at 6,200 and resistance at the 6,450 area. — J.I.DP. Tabile