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PHILIPPINE STOCKS concluded higher on Tuesday as investors acquired undervalued stocks following the market’s two-day downturn, but sentiment remained wary ahead of the US Federal Reserve’s policy announcement.
The benchmark Philippine Stock Exchange index (PSEi) increased by 0.32% or 19.40 points, finishing at 5,953.16, while the broader all shares index climbed by 0.21% or 7.78 points to 3,589.51.
“The Philippine market closed in the positive, fueled by bargain-hunting after two straight days of intense selling. Investors stayed cautious, closely observing forthcoming earnings announcements and the expected next action from the US Federal Reserve, which could affect market trajectory,” Luis A. Limlingan, Head of Sales at Regina Capital Development Corp., mentioned in a Viber communication.
“The market broke its losing streak, but the recovery of a third of a percent was unconvincing as investors anticipate the Fed’s rate cut decision,” stated Alfred Benjamin R. Garcia, Research Head at AP Securities, Inc., in a Viber message.
Fed policymakers are largely anticipated to lower US short-term borrowing rates this week by a quarter of a percentage point for the second time this year as they aim to avoid further cooling in the labor market, according to Reuters.
Chances are it won’t be the final action in this process.
Rising unemployment insurance claims imply that labor market demand remains subdued, even as the government shutdown postpones the release of most official economic data, including the unemployment rate, previously estimated at 4.3% in August.
Lower-than-expected inflation figures, most notably last week’s report indicating that the consumer price index increased by 3% over the year ending September, have shifted concerns regarding tariff-induced price pressures to the background.
A quarter-point rate decrease on Wednesday at the conclusion of the Fed’s two-day meeting would position the policy rate in the 3.75%-4% bracket. Financial markets are heavily wagering on additional rate cuts in both December and January.
Locally, sectoral indices presented a mixed performance on Tuesday. Mining and oil plummeted by 4.42% or 565.68 points to 12,230.69; industrials fell by 0.27% or 24.08 points to 8,772.47; and property marginally slipped by 0.01% or 0.39 point to 2,198.54.
“The mining sector was the largest loser with a fall of 4.4% as gold prices continue to decline,” Mr. Garcia remarked.
Conversely, financials advanced by 1.15% or 22.44 points to 1,970.64; services rose by 0.42% or 9.76 points to 2,282.42; and holding companies edged up by 0.05% or 2.43 points to 4,807.25.
Advancers barely surpassed decliners, 95 to 94, while 62 stocks remained unchanged.
Value turnover decreased to P4.64 billion on Tuesday, with 1.18 billion shares changing hands compared to Monday’s P18.77 billion with 11.82 billion issues traded.
Net foreign selling rose to P432.57 million from P313.66 million. — Alexandria Grace C. Magno with Reuters
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