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Thursday, November 30, 2023

Market declines slightly; AbaCore and URC down

The stock market slipped Tuesday on profit making ahead of the release of key US consumer price data that is expected to show slightly slowing inflation in the world’s largest economy.

The Philippine Stock Exchange Index fell 13.94 points, 0.2 percent, to 6,701.81 on a value turnover of P5.5 billion. Losers beat gainers, 107 to 71, with 44 issues unchanged.

AbaCore Capital Holdings Inc.,  a company that holds an exclusive right to lease online lottery equipment for the lotto operations of the Philippine Charity Sweepstakes Office in Visayas and Mindanao, sank 14.3 percent to P2.34, while major property developer Ayala Land Inc. of the Ayala Group dropped 2.2 percent to P28.50.

Universal Robina Corp. of the Gokongwei Group, the biggest snack food maker, declined 1.5 percent to P126.40, but BDO Unibank Inc. of the Sy Group, the largest lender in terms of assets, rose 1.5 percent to P129.90.

The rest of  Asian stocks largely continued a global rally on Tuesday,

Stocks rose in Japan, Australia, Singapore and Taiwan, with South Korea and Shanghai also gaining after reopening following a public holiday. European stocks were steady at the open.

Hong Kong shares edged lower at the close, erasing modest gains made earlier in the day.

US consumer price index (CPI) data will be released on Tuesday, with analysts expecting inflation to slow to eight percent, driven mostly by falling gasoline prices. US inflation hit a 40-year high in June, touching 9.1 percent.

Easing inflation, however, is unlikely to slow the pace of the US Federal Reserve’s tightening of monetary policy, with another 75-basis-point interest rate hike expected at its meeting next week.

The Fed has already instituted two consecutive rate hikes of that amount, and in recent days bank chief Jerome Powell has indicated the increases will continue until inflation is tamed.

While the overall US inflation number is expected to slow, prices for food and housing are projected to have increased, raising the strain on household budgets.

“Risks remain skewed to the upside, due to an uncertain outlook for key inputs, including agricultural and energy commodities, as well as the pass-through of wage gains in a tight labour market,” according to Barclays US analysts Pooja Sriram and Jonathan Hill.

Last week, the European Central Bank also adopted a policy of monetary tightening, raising its key rate by a historic 75 basis points, with analysts expecting a similar-sized increase at the next policy meeting in October.

In Tokyo, stocks closed higher on Tuesday, with investors ending the session by tempering some of the gains with caution at the Nikkei’s rise over recent days.

Brokerage Okasan Online Securities said investors were looking “to square their positions” ahead of the US CPI data being released.

Seoul led the day’s gains in Asia, rising by 2.7 percent on Tuesday.

US stocks on Monday had ended bullish: the broad-based S&P 500 advanced 1.1 percent, continuing the upswing last week that snapped a three-week losing streak. With AFP

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