Slow start for Philippine stocks amid limited catalysts

MANILA, Philippines — The Philippine stock market opened the week on a subdued note due to a dearth of new developments.

The benchmark Philippine Stock Exchange index (PSEi) closed 28.26 points or 0.45 percent lower at 6,183.63.

The broader All Shares index was likewise down by 0.59 percent or 19.45 points, at 3,305.32.

All the sectoral gauges, meanwhile, were mixed but mostly ending in negative territory.

Holding firms, financials, mining and oil and industrial all finished in the red while services and property closed in the positive territory.

Total value turnover reached P3.7 billion. Market breadth was negative, 119 to 66 while 42 issues were unchanged.

“Philippine shares opened quietly as investors wait for a fresh batch of economic data to be released,” said Luis Limlingan of Regina Capital.

The key economic data releases for this week in the US are the Leading index, Chicago Fed National Activity Index (Nov. 21) and the Federal Reserve Open Market Committee meeting minutes (Nov. 22) while in the Philippines, the latest Balance of Payments position was due yesterday.

Meanwhile, world shares were mixed yesterday after Wall Street closed its third straight winning week with a tiny gain.

Markets hope inflation has cooled enough for the Federal Reserve to finally stop its market-crunching hikes to interest rates.

The Fed has already raised its main interest rate to the highest level since 2001, trying to slow the economy and dent financial markets just enough to get inflation under control without causing a painful recession.

Now traders are trying to bet on when the Fed could actually begin cutting interest rates, something that can juice prices for investments and provide oxygen for the financial system.

The Fed has said that it plans to keep rates high for a while to ensure that the battle against inflation is definitively won, but traders are thinking cuts could begin early in the summer of 2024.

Too steep a drop in Treasury yields and too big a rally in stock prices could conspire to work against Wall Street. Chair Jerome Powell said after the Fed’s last meeting on interest rates that it may not hike any more if the summer’s jump in Treasury yields and fall in stock prices remained “persistent.” That’s because such pressures could act like substitutes for more rate increases on their own.

One source of potential worry about inflation has been receding in recent weeks. Oil prices have plunged amid worries about a mismatch between too much crude supply and too little demand.