Local shares end flat amid lack of strong leads
THE MAIN INDEX traded flat on Wednesday, failing to follow the rebound of US markets due to strong data coupled with an affirmation of two more Federal Reserve rate hikes this year.
“Philippine stocks failed to match US stocks rebounding from their recent lull to close comfortably higher on the back of a blowout reading on consumer sentiment (the best since December 2000), the fastest housing price growth since mid-2014, a comment from Fed Chair Stan Fischer, rallying crude prices and a new all-time high for Apple,” said Luis A. Limlingan, managing director at Regina Capital Development Corp. in a text message.
US stocks ended sharply higher on Tuesday, with financial and energy shares surging as data showed US consumer confidence soaring to a more than 16-year high.
The S&P 500’s best day in nearly two weeks came after a record-setting rally for stocks in the wake of President Donald J. Trump’s election in November had stalled this month. The Dow Jones Industrial Average snapped an eight-day losing streak, which had been its longest run of losses since 2011.
US consumer confidence surged to a more than 16-year high in March amid growing labor market optimism, while the trade deficit in goods narrowed sharply in February. The economy’s strengthening fundamentals were bolstered by other data showing further increases in house prices in January.
The Dow Jones Industrial Average rose 150.52 points or 0.73% to 20,701.5, the S&P 500 gained 16.98 points or 0.73% to 2,358.57 and the Nasdaq Composite added 34.77 points or 0.60% to 5,875.14.
Mr. Limlingan added that US Treasuries reversed early gains to trade flat following the release of the strongest consumer sentiment print since 2000 which sapped demand for debt.
“The selling accelerated after Federal Reserve Vice Chairman Stan Fischer re-affirmed the central bank’s forecast for two more rate increases in 2017,” Mr. Limlingan added.
The Fed official said the US central bank’s consensus estimate for two more rate hikes this year “seems about right.”
Manuel Antonio G. Lisbona, PNB Securities, Inc. president, noted that even as the PSEi ended flat on Wednesday, it remained within the 7,150-7,350 trading range. “The market pierced resistance intraday but failed to sustain the breach. Most likely the market will again move towards support at 7,150 in the next few sessions.”
Subsectors closed mixed on Wednesday. Financials declined 0.60% or 11.02 points to 1,824.44; mining and oil slid 0.46% or 55.32 points to 11,962.85; industrials went down 0.30% or 33.06 points to 10,843.56; and property inched down 0.18% or 5.73 points to 3,170.29.
Meanwhile, holding firms climbed 0.33% or 24.90 points to 7,493.76 and services went up 0.19% or 3.01 points to 1,530.18. -- J.C. Lim with Reuters