PHILIPPINE STOCKS climbed on Wednesday on improved market sentiment following a slower-than-expected inflation print in December.
The benchmark Philippine Stocks Exchange index (PSEi) inched up by 50.13 points or 0.71% to close at 7,091.40 on Wednesday, while the broader all shares index advanced 16.27 points or 0.43% to 3,794.17.
The local bourse was closed on Tuesday due to technical issues.
“Though market was volatile today. It was up on bargain hunting after an unexpected lower inflation reading December together with a slight uptick in manufacturing output on the previous month,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Wednesday.
Inflation slowed to its lowest level in a year in December 2021 as food and transport prices eased, bringing the full-year average above the government’s target, data released by the Philippine Statistics Authority (PSA) on Wednesday showed.
Preliminary data from the PSA showed headline inflation eased to 3.6% last month from 4.2% in November. December’s inflation print was the slowest reading in 12 months or since the 3.5% recorded in December 2020.
Inflation averaged 4.5% for 2021, higher than the 2.6% recorded in 2020. This breached the central bank’s 2-4% target band as well as the revised 4.4% forecast for the year.
Meanwhile, the Philippines Manufacturing Purchasing Managers’ Index climbed to 51.8 last month from 51.7 in November, the highest since 52.2 in March 2021.
First Metro Investment Corp. Head of Research Cristina S. Ulang noted that slow inflation gives the central bank room to maintain its accommodative policy to support the economy’s recovery.
“The market recovery shows all the more that the glitch was ignored and bargain hunting prevailed on the view that even with the high positivity rate of the new coronavirus disease 2019 virus, the mild symptoms based on hospital ER (emergency room) cases suggest that tough lockdown could be a thing of the past,” Ms. Ulang added.
Most sectoral indices ended in the green except for property, which slipped by 1.44 points or 0.04% to 3,124.94, and industrials, which dropped 4.34 points or 0.04% to 10,313.45.
On the other hand, services gained 24.65 points or 1.25% to 1,982.85; financials improved by 19 points or 1.20% to 1,599.85; mining and oil increased 73.79 points or 0.75% to 9,789.47; and holding firms added 44.14 points or 0.64% to 6,847.63.
Value turnover was at P6.94 billion with 973.94 million shares switching hands on Wednesday, higher than the P4.26 billion with 722.25 million issues on Monday.
Decliners beat advancers, 108 against 86, while 50 names closed unchanged. Foreigners turned buyers with P276.15 million in net purchases, a reversal of the P233.82-million net outflow seen on Monday.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan put the PSEi’s support at 7,020 and resistance at 7,250. — M.C. Lucenio