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Saturday, April 13, 2024

Stocks end in the red as market awaits US inflation data release

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Philippine stocks opened the week in the red amid profit-taking after last week’s steep climb.

The 30-company Philippine Stock Exchange index dropped 42.34 points, or 0.62 percent, to close at 6,807.82, while the broader all-shares index dipped 8.15 points, or 0.23 percent, to settle at 3,566.06.

Analysts said investors were on a wait-and-see stance ahead of the release of US January inflation data early this week.

“A slower US inflation is set to fuel expectations that the US Federal Reserve will find interest rate cuts palatable in the coming months,” said Regina Capital Development Corp, head of sales Luis Limlingan.

Limlingan said investors were also awaiting the results of MSCI rebalancing and the Bangko Sentral ng Pilipinas’ Monetary Board meeting scheduled this Thursday.

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Total value traded reached P4.17 billion.

Meanwhile, markets were mixed in Asia on Monday in holiday-thinned trade as investors look ahead to the release of crucial US inflation data due this week.

Another record close for the S&P 500 in New York did little to inspire buying on a day when most of the region is closed for the Lunar New Year break.

Wall Street welcomed revised data showing the US consumer price index (CPI) came down on-month in December.

That added to optimism that the Federal Reserve is on course to get inflation under control, though observers were skeptical as to whether officials will cut interest rates as early as markets expect.

Comments from Fed officials in recent weeks have pushed back against market bets on a series of cuts this year starting in March, with commentators now tipping a first move in May.

Still, sentiment was helped by the belief that while rates remain elevated, the world’s top economy is still strong, with most experts hopeful it will not drop into recession, as had been feared last year.

Eyes are now on the release of January CPI figures, which are forecast to show another slowdown.

“High inflation rarely has been tamed without precipitating a recession,” said Ed Yardeni of Yardeni Research Inc.

“The Fed has steered inflation down toward its two percent target, while allowing the US economy to fly, avoiding a hard landing.”

The S&P 500 finished above 5,000 points for the first time, marking its 10th all-time high this year, boosted by surges in tech titans including Amazon, Apple and Microsoft.

But Asian investors were a little less enthusiastic, with Sydney, Bangkok, Mumbai and Wellington falling while Jakarta and Manila edged up.

Tokyo, Hong Kong, Shanghai, Taipei, Seoul, Singapore and Kuala Lumpur were all closed for holidays.

Oil prices dipped after Friday’s gains fueled by geopolitical worries linked to the Middle East crisis. With AFP

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