Investors' anticipation of the US consumer inflation data and a possible pause in local policy rates led to a sideways trade on the Philippine Stock Exchange index (PSEi) on Tuesday, September 12, 2023. The PSEi dipped by 3.54 points or 0.05% to close at 6,230.20, while the broader all shares index fell by 4.02 points or 0.12% to 3,359.43.
The market's performance was also influenced by the decline in foreign direct investments (FDI) net inflows, which dropped by 3.9% to $484 million in June from $503 million in June 2022. This was also a slight decrease from the $487-million FDI net inflows in May, according to central bank data released on Monday. For the first half of the year, FDI net inflows fell by 20.4% to $3.9 billion from $4.9 billion a year ago.
"The local bourse experienced a slight dip... as investors took profits on the last minute following its two-day rally. Also, the sentiment was further dampened by the lower FDI net inflows recorded in June," said Claire T. Alviar, Research Analyst at Philstocks Financial, Inc., in a Viber message.
Meanwhile, Jeff Radley C. See, Head Trader at Mercantile Securities Corp., noted that investors are awaiting economic reports from the US government this week to get a clearer picture of whether the Federal Reserve will continue to increase interest rates or pause.
Market activity remained muted with 535.63 million shares valued at P3.97 billion changing hands while net foreign selling accelerated to P961.5 million.
Sectoral indices were mixed on Tuesday with services, holding firms and property slipping while mining and oil, financials and industrial counters pushed higher.
The US consumer price index (CPI) data, which could influence the Federal Reserve's policy decision later this month, is set to be released on Wednesday. The US CPI rose 0.2% in July, matching June’s gain. On an annual basis, the CPI advanced by 3.2%. The Federal Reserve will hold its policy meeting on September 19-20.
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