SHARES closed lower on Thursday on profit taking amid hints of slower rate hikes from the US Federal Reserve and inflation concerns.
The benchmark Philippine Stock Exchange index (PSEi) lost 45.79 points or 0.67% to end at 6,734.99 on Thursday, while the broader all shares index declined by 12.95 points or 0.36% to 3,501.03.
“Local share prices broke their six-day winning streak as traders took profits from the strong run-up,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber Message.
Mr. Vistan said traders also priced in the release of November inflation data on Dec. 6.
“Rising prices of basic commodities will eat into consumers’ purchasing power and adversely affect corporate earnings and economic growth,” he added.
Inflation may have settled within 7.4% to 8.2% in November due to higher electricity rates and soaring prices of agricultural commodities, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.
If realized, inflation would exceed the BSP’s 2-4% target for the eighth consecutive month. Headline inflation stood at 7.7% in October.
“Philippine shares started the month on profit taking, with investors selling on news, with Fed Chairman Jerome H. Powell’s statement signaling slower rate hikes,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Investors’ focus Thursday turns to initial jobless claims ahead of the much-anticipated November jobs report due out Friday. The payrolls report is expected to provide more clarity on the labor market, and whether it continues to cool,” Mr. Limlingan said.
Mr. Powell on Wednesday said it was time to look at smaller interest rate hikes, but borrowing costs may remain high for a while to help bring down elevated inflation.
The US central bank has raised borrowing costs by 375 basis points since March, with the fed funds rate now at the 3.75-4% range.
Its next meeting is scheduled on Dec. 13-14.
Back home, sectoral indices ended split on Thursday. Property lost 112.83 points or 3.75% to close at 2,894.87; services decreased by 39.49 points or 2.23% to 1,727.48; and financials declined by 14.25 points or 0.83% to 1,684.41.
Meanwhile, mining and oil added 328.90 points or 3.21% to end at 10,551.92; holdings firms increased by 92.84 points or 1.42% to 6,590.24; and industrials climbed by 19.55 points or 0.2% to close at 9,506.72.
Value turnover declined to P10.11 billion on Thursday with 796.43 million shares changing hands from the P23.47 billion with 2.23 billion issues traded on Tuesday.
Advancers outnumbered decliners, 112 to 77, while 40 names closed unchanged.
Net foreign selling declined to P392.86 million on Thursday from P2.17 billion on Tuesday. Philippine financial markets were closed on Nov. 30, Wednesday, in commemoration of Bonifacio Day.
AB Capital Securities’ Mr. Vistan placed PSEi’s immediate support at 6,680 and resistance at 6,850. — Justine Irish D. Tabile