STOCKS fell on Thursday as investors digested the latest US consumer inflation data and their potential impact on the US Federal Reserve’s policy decision next week.
The Philippine Stock Exchange (PSEi) index fell 0.02% or 1.36 points to end at 6,641.35 on Thursday, while the broader all-share index fell 0.06% or 2.48 points to close at 3,756.07.
“Philippine stocks matched the mixed results of US markets as investors considered the latest CPI (consumer price index) figures. The November CPI report was in line with economists’ expectations, fueling hopes for another rate cut by the Fed during its policy meeting next week,” said Regina Capital Development Corp Head of Sales. Luis A. Limlingan in a Viber message.
Wall Street’s benchmark S&P 500 index rose on Wednesday and a rally in U.S. stocks lifted the Nasdaq above the 20,000-point mark for the first time, after a U.S. inflation report boosted expectations of a U.S. interest rate cut. Federal Reserve, reports Reuters.
The Dow Jones Industrial A average fell 99.27 points or 0.22% to 44,148.56; the S&P 500 gained 49.28 points or 0.82% to 6,084.19; and the Nasdaq Composite gained 347.65 points or 1.77% to 20,034.90.
The consumer price index rose 0.3% last month, the biggest gain since April after advancing 0.2% for four consecutive months, the Labor Department’s Bureau of Labor Statistics said. In the 12 months to November, the CPI rose 2.7% after rising 2.6% in October. The CPI increase was in line with economists’ expectations.
Financial markets have almost fully priced in a quarter-point rate cut at the Fed’s Dec. 17-18 policy meeting, according to CME Group’s FedWatch tool. Before the release of inflation data, the probability was around 86%.
The Fed began its cycle of monetary policy easing in September. The estimated overnight interest rate is now in the range of 4.5%-4.75%.
“The PSEi was slightly lower after the dollar-peso exchange rate was slightly higher earlier,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message. The local unit closed at P58.24 per dollar on Thursday, up four cents from its close of P58.28 on Wednesday, Bankers Association of the Philippines data said.
Most industrial indices fell on Thursday. The stock fell 0.98% or 24.18 points to 2,436.95; industrials fell 0.46% or 42.50 points to 9,124.67; mining and oil decreased by 0.12% or 9.05 points or 7,534.62; and funds were down 0.03% or 0.75 point to 2,253.29.
Meanwhile, services rose 0.72% or 15 points to 2,085.54, and holding firms rose 0.59% or 33.78 points to 5,683.06.
Turnover increased to P6.18 billion on Thursday with 589.05 million shares exchanged from P5.23 billion and 905.03 million shares traded on Wednesday.
They have decreased in number from developers, 96 compared to 82, while 70 names have not been changed.
Total exports decreased to P381.81 million on Thursday from P497.83 million on Wednesday. – Ashley Erika O. Jose with Reuters
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