PHL shares end higher on Federal Reserve watch

By Denise A. Valdez, Reporter

LOCAL SHARES ended higher on Wednesday as investors remained on the lookout for hints on the next policy move of the US Federal Reserve.

The bellwether Philippine Stock Exchange index (PSEi) gained 0.45% or 36.17 points to close at 8,078.21 yesterday, ending the two-day losing streak it saw from the start of the week.

The broader all-shares index also rose 0.43% or 21.43 points to end at 4,922.17 — a reversal of its performance in the past two days.

“The PSEi continues to trade sideways ahead of Fed chief Powell’s testimony to Congress which will likely provide additional details to their decision by the end of this month,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail Wednesday.

Fed Chairman Jerome Powell is scheduled to deliver his semiannual monetary policy report at the US House and Senate panel on July 10-11, leaving investors on the edge as they await the central bank’s near-term monetary policy direction.

While value turnover yesterday was low, Regina Capital Development Corp. Head of Sales Luis A. Limlingan noted the buy-up at the market’s closing was driven by investors’ anticipation of a rate cut in the United States.

“Investors bought towards closing as investors speculate on the Federal Reserve’s next moves and wait for more clues on the timing of a possible rate cut,” he said in a mobile message.

Value turnover dropped to P5.36 billion yesterday from Tuesday’s P5.89 billion, with 2.38 billion shares changing hands.

The rate cut expectation, initially poised at “at least a 25 basis points cut,” is seen as a counter measure to the supposed economic slowdown from the US’ trade war with China.

Sectoral indices were divided equally between losers and gainers.

Leading those that ended in the green was the services counter, which climbed 1.58% or 26.14 points to 1,673.97. Holding firms increased 1.25% or 96.46 points to 7,795.68; and financials rose 0.12% or 2.23 points to 1,735.65.

Meanwhile, mining and oil shares lost 1.15% or 86.26 points to 7,416.84; industrials fell 0.59% or 71.72 points to 11,894.71; and property declined 0.05% or 2.5 points to 4,343.18.

Decliners outnumbered advancers, 109 to 93, while 39 names closed unchanged.

Foreign investors were buyers yesterday as net inflows were logged at P19.40 million, albeit smaller than the previous session’s net purchases worth P735.12 million.

Papa Securities’ Mr. Perez said the index “should continue to trade sideways” in the coming days due to the Fed watch.

Regina Capital’s Mr. Limlingan concurred, saying, “In the minutes, market will look for further discussion of the path of the policy rate and the growth and inflation.”

The Fed was also scheduled to release the minutes of its June 18-19 meeting yesterday.