Unfazed by stubbornly high US inflation, PSEi ends week with modest gains

MANILA, Philippines — Philippine shares capped the week with “modest” gains, joining other markets in Asia that tracked a sharp swing on Wall Street in response to a forecast-beating US inflation report that cemented expectations for more big Federal Reserve rate hikes.

The bellwether Philippine Stock Exchange index (PSEi) went up 0.15% to end the week at 5,904.75. Meanwhile, the broader All Shares index finished trading up 0.41%.

Most sectoral counters ended in the green led by property firms, which went up by 1.85%. The services sub-index shed 1.18% while holding firms lost 0.53%.

Luis Limlingan, head of sales at Manila-based brokerage Regina Capital, said local equities were unfazed by a new report showing US inflation remains brutally high.

“Philippine shares managed to close with moderate gains despite the hotter-than-expected US September inflation reading,” he said in a market commentary.

The hotly awaited US inflation report showed prices rose last month at a faster clip than expected despite a series of interest rate increases this year, which have fanned fears of a global recession.

The month-on-month reading came in double estimates, while core inflation — which strips out volatile energy and food prices — was also elevated.

The figures sparked a sharp plunge on Wall Street but the selling quickly reversed, and all three main indexes finished the day with gains of more than 2% with analysts suggesting several reasons for the extreme move.

Some said the initial selling may have been a knee-jerk reaction before traders accepted the data was not as bad as other recent reports, while technical factors were also flagged.

Others speculated that equities had finally reached their bottom after a year of selling that has seen many indexes plunge into correction territory having lost more than 20% from their recent peaks.

Asian markets surge

Tokyo piled on more than 3%, while Hong Kong, Seoul, Taipei and Mumbai added more than 2%. There were also big gains in Sydney, Singapore and Wellington.

There was little reaction to news that Chinese consumer inflation had hit a two-year high partly because of surging pork prices, though Shanghai was well up ahead of the start of a key Communist Party gathering at which Xi Jinping is expected to be named president for a third term.

At home, a total of 443.3 million shares valued at 4.7 billion were traded on Friday. Foreigners bought P513.2 million more shares than they sold on Friday. — Ian Nicolas Cigaral with AFP