Stocks decline further ahead of US inflation data

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STOCKS continued to decline on Thursday to track Wall Street’s drop overnight ahead of the release of latest US consumer inflation data.

The benchmark Philippine Stock Exchange index (PSEi) lost 74.11 points or 1.18% to end at 6,167.57 on Thursday, while the broader all shares index declined by 15.08 points or 0.45% to 3,277.66. 

Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said the bellwether index ended in the red as it tracked US stocks lower.

“[The] initial returns of the US midterm elections offered no concise answer on which party will indeed take control of Congress. With the voting end result still uncertain, investors are paying close attention to the crucial release of the US October inflation data, which will provide hints on the path of prospective Fed interest rate increases,” Mr. Lood said in a Viber message.

“The PSEi ended in red as the market focuses more on the upcoming US inflation report due on Thursday night, ignoring the faster-than-expected Philippine GDP (gross domestic product) growth for the third quarter,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message. 

On Wednesday, Wall Street went down as investors awaited the results of the US midterm elections and the release of the October consumer price index (CPI) report.

The Dow Jones Industrial Average declined by 1.95% to 32,513.94; the S&P 500 dropped by 2.08% to 3,748.58; and the Nasdaq went down by 2.48% to 10,353.18. 

October US CPI data were scheduled to be released overnight, which could give clues on the US Federal Reserve’s next policy move as investors remain divided on a possible dovish pivot by the central bank as early as next month. The Fed raised rates by 75 basis points (bps) for a fourth straight time this month, bringing total hikes since March to 375 bps.

Meanwhile, Philippine GDP grew by 7.6% in the third quarter, faster than the revised 7.5% in the preceding three-month period and the 7% seen in the same quarter last year.

Sectoral indices ended mixed on Thursday. Holding firms declined by 210.35 points or 3.5% to 5,793.77; financials went down by 15.90 points or 0.98% to 1,598.19; and industrials dropped 54.40 points or 0.6% to 9,005.23. 

Meanwhile, property gained 34.88 points or 1.3% to end at 2,708.68; mining and oil rose by 108.93 points or 1.16% to 9,466.69; and services climbed by 5.18 points or 0.32% to 1,596.41.

Value turnover went down to P4.63 billion on Thursday with 455.57 million shares changing hands from P5.57 billion with 427.71 million issues traded on Wednesday.

Net foreign buying declined to P396.10 million on Thursday from P509.32 million on Wednesday. 

AP Securities’ Mr. Temporal placed PSEi’s immediate support at 6,000 and resistance at 6,300. — A.E.O. Jose