Investors cash in amid CPI gain
Fund managers are also awaiting the movement of the US market, which will start trading later after coming from the Independence Day holiday
Local market took a breather on Tuesday, snapping a three-day win streak and tumbled back to the 6,900-level despite the slower-than-expected inflation as investors took profits. Inflation came in at 4.1 percent in June against the 4.3 percent median estimate.
The Philippine Stock Exchange index settled down 43.95 points to 6,992.43 after moving between 6,992.43 and 7,064.24 on 82,756 shares exchanged worth P4.906 billion.
Investors sold on news of the release of June consumer price index (CPI) which was an improvement from the previous reading.
According to the Philippine Statistics Authority, inflation continued to moderate at 4.1 percent from a year ago, which falls closer with the Bangko Sentral ng Pilipinas (BSP) target range of two percent to four percent.
No need for intervention
The tapering off was mainly due to the unwinding of supply side constraints especially in the food category, hence there was no immediate need for the BSP to step in earlier, Regina Capital Development Corp. managing director Luis Limlingan said.
Meanwhile, fund managers are also awaiting the movement of the US market, which will start trading later after coming from the Independence Day holiday, he added.
The futures point to a muted start during the shortened trading week. The Dow futures climbed 30 points, while the S&P 500 futures were unchanged.
Oil gains extended
Oil extended gains in Asian trade after a gathering of top producers fell apart without any agreement on a plan to lift output despite stockpiles shrinking and demand surging along with the global economic recovery.
The breakdown of talks between Organization of Petroleum Exporting Countries and other key crude nations raised the possibility of $100 a barrel, a level not seen since 2014 and stoking fresh fears about inflation, which could force central banks to taper their monetary policy or hike interest rates earlier than thought.