Philippine stocks end flat ahead of inflation data

MANILA, Philippines — The Philippine stock market closed flat yesterday as investors remained cautious ahead of the release of inflation results on Friday.

The Philippine Stock Exchange Composite index (PSEi) closed at 6,593.80, slightly up by 2.33 points or 0.04 percent.

On the other hand, the broader All Shares index slipped by 0.72 points or .02 percent to 3,515.95.

Mining and oil, industrial, property and holding firms closed in the green while services and financials finished in the red.

Total value turnover reached P3.9 billion and market breadth was negative, 97 to 75 while 53 issues were unchanged.

Unicapital Securities said market sentiment was tempered by offshore cues with China reporting a contraction in manufacturing data for the fourth straight month.

“In the near-term we expect the index to consolidate ahead of Philippine July inflation results to be released this Friday with the median expectation at 4.9 percent, below June’s 5.4 percent. Inflation deceleration remains a positive aspect in managing headwinds and keep index levels buoyant at the 6,550 to 6,000 support band,” Unicapital Securities said.

Meanwhile, global shares were mixed yesterday as market optimism set off by a Wall Street rally was balanced by lingering worries about inflation and regional growth.

Investors were also watching for the policy decision by the Reserve Bank of Australia, which kept its rates steady.

The Japanese government released the nation’s unemployment rate for June, which inched down 0.1 percentage point to 2.5 percent.

Several reports in the coming week could poke holes in the theory that inflation will keep coming down enough for the US Federal Reserve not only to stop hiking interest rates, but to begin cutting them by early next year.

Big names in the market, such as Rob Arnott at Research Affiliates, are warning not to be “overly hasty in popping the champagne corks.” Arnott sees the possibility of inflation rebounding again later this year, even though it’s recently cooled considerably.

Fed Chair Jerome Powell has pointed to Friday’s upcoming report on the overall United States job market as an important data point. Growth needs to be strong enough to keep a lid on worries about a possible recession. But a reading that’s too hot could also mean upward pressure on inflation, which could push the Fed to get more aggressive about rates.