EconomyEditor's PickPSEi surges, tracks Wall St. on slower US inflation

August 11, 2022

PHILIPPINE SHARES surged on Thursday, tracking Wall Street as a slower consumer inflation reading in the world’s largest economy caused US stocks to rally.

The 30-member Philippine Stock Exchange index (PSEi) soared by 208.84 points or 3.22% to close at 6,680.68 on Thursday, while the broader all shares index increased by 89.06 points or 2.57% to 3,550.57.

“Shares on the Philippine Stock Exchange rose, tracking overnight gains on Wall Street, amid bets the central bank will be less hawkish as the US Federal Reserve potentially slows the pace of rate hikes,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“PSEi surged earlier on the back of rising expectations of slower rate hikes after US CPI (consumer price index) print came in below expectations last night at 8.5%,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

“Looking ahead, we expect this rally to continue in the very near term as some profit taking is likely to be offset by sustained foreign net inflows. However, market could be choppy again ahead of BSP’s (Bangko Sentral ng Pilipinas) meeting next week on Thursday,” Mr. Temporal said.

Wall Street surged on Wednesday as US CPI slowed more than expected in July, raising hopes that the Fed’s upcoming rate hikes would be less aggressive.

The Dow Jones Industrial Average rose 535.10 points or 1.63% to 33,309.51; the S&P 500 gained 87.77 points or 2.13% to 4,210.24; and the Nasdaq Composite climbed 360.88 points or 2.89% to 12,854.81.

The US CPI was flat last month, US Labor department data showed. It rose by a less-than-expected 8.5% annually after a 9.1% rise in June.

The Fed has hiked key rates by 225 basis points (bp) since March, including back-to-back 75-bp increases in June and July.

Back home, all sectoral indices ended in the green on Thursday. Property jumped by 130.31 points or 4.46% to 3,049.10; holding firms rose by 200.94 points or 3.24% to 6,392.02; services climbed by 54.12 points or 3.20% to 1,744.68; industrials went up by 241.50 oints or 2.50% to 9,876.45; mining and oil gained 242.88 points or 2.13% to close at 11,598.54; and financials added 26.45 points or 1.75% to finish Thursday’s session at 1,537.95.

Advancers outnumbered decliners, 144 versus 51, while 43 names closed unchanged.

Value turnover rose to P8.63 billion on Thursday with 917.29 million shares changing hands from P6.34 billion with 843.4 million issues seen the previous trading day.

Foreigners turned buyers anew, logging P951.54 million in net purchases on Thursday from the P119.38 million in net selling seen the previous trading day.

AP Securities’ Mr. Temporal placed the PSEi’s support at 6,500 and resistance at the 6,800 area, while Globalinks Securities and Stocks’ Mr. Arce put support at 6,300 and resistance at 6,800. — J.I.D. Tabile

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