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Shares drop in cautious trade before BSP, US CPI


STOCKS declined on Monday as investors remained cautious ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting and the release of US inflation data this week.

The benchmark Philippine Stock Exchange index (PSEi) went down by 38.03 points or 0.55% to close at 6,838.76 on Monday, while the broader all shares index shed 10.21 points or 0.27% to end at 3,642.96.

“Philippine shares were sold to start the week as investors will keep their focus on the policy-setting meeting on Feb. 16. So far, economists are split as to whether the BSP (Bangko Sentral ng Pilipinas) will rate the benchmark rates at a slower pace,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP is widely expected to raise benchmark interest rates at its meeting on Thursday after headline inflation hit a 14-year high in January.

A BusinessWorld poll last week showed 17 out of 18 analysts see the Monetary Board hiking borrowing costs at its first meeting of the year. Nine analysts see a 50-basis-point (bp) hike, while eight anticipate a 25-bp increase.

The central bank raised borrowing costs by 350 bps in 2022, bringing its policy rate to 5.5%.

“The local bourse fell as investors await the meeting of the BSP as well as the US inflation rate that could influence the decision of the Federal Reserve on interest rates,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Stocks moved lower as investors stayed on the sidelines ahead of the release of the critical US inflation data. Market participants turned cautious as consensus estimates expect month-on-month US consumer prices to rise significantly,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

The January US consumer price index (CPI) is scheduled to be released on Feb. 14.

The US central bank raised the fed funds rate by 25 bps to 4.5 and 4.75% range at its Jan. 31 to Feb. 1 meeting.

Back home, sectoral indices were split on Monday. Holding firms went down by 80.78 points or 1.21% to 6,563.87; property lost 15.45 points or 0.51% to end at 2,983.82; and services declined by 6.89 points or 0.40% to 1,716.85.

Meanwhile, mining and oil added 48.91 points or 0.42% to close at 11,467.02; industrials went up by 19.51 points or 0.19% to 9,870.96; and financials gained 0.88 point or 0.04% to 1,831.99.

Value turnover went up to P6.60 billion on Monday with 1.01 billion shares changing hands from the P5.92 billion with 824.88 million issues traded on Friday.

Advancers outnumbered decliners, 101 versus 99, while 39 names closed unchanged.

Net foreign selling went up to P373 million on Monday from P24.26 million on Friday.

AB Capital’s Mr. Vistan placed the PSEi’s support at 6,800 and resistance at 7,000. — Ashley Erika O. Jose

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