The market started strong but retreated at market close. It reached a high of 8213.71 before closing at 8058.45, lower by 11.03 points or 0.14 percent. The broader All Share index was higher by 0.02 percent.
Sub-indices were mostly higher with the exception of the Holdings sector which closed in the red. The best performing sector is the Mining and Oil sector rising by 1.37 percent while the worst performing sector is the Holdings sector which fell by 1.23 percent.
Within the Holdings sector, SM led the sub-index lower as it closed at 980, which was lower by 1.71 percent versus yesterday’s close. JGS closed at 63.55, lower by 3.71 percent. AC closed at 927.00, lower by 0.91 percent. AEV closed at 61.75, lower by 0.88 percent.
Within the Mining and Oil sector, SCC led the sub-index higher as it closed at 24.15, which was higher by 2.33 percent versus yesterday’s close. NIKL closed at 2.76, higher by 5.34 percent. PXP closed at 14.30, higher by 0.14 percent. CPM closed at 2.110, higher by 0.48 percent.
Which Stocks Traded the Largest Volume?
The most active stocks today include ALI with PHP 477.19 million in traded value. AC also made it to the top gainers with a traded value of PHP 394.66 million. JFC also had PHP 337.32 million in traded value.
Gainers and Losers for the Day
Significant gainers include ABA, higher by 12.00 percent, MG by 10.33 percent, BHI by 10.00 percent, FPI by 9.65 percent, IS by 8.87 percent, ISM by 8.19 percent and RCI by 7.96 percent.
Significant losers include ZHI by 28.72 percent, NI by 11.72 percent, ABG by 9.97 percent, GEO by 7.69 percent, CYBR by 6.82 percent, BCOR by 5.90 percent, and PHA by 5.26 percent.
Market Breadth
There were 140 advances, 76 declines, while 42 names remain unchanged. Value turnover totaled PHP 6.99 billion. Foreign exchange rate stood at USD 1 : PHP 52.41.
Lower Inflation – More Wiggle Room
Inflation figure for the month of January was recorded at 4.4 percent, lower than the 5.1 percent recorded in December, according to the Philippine Statistics Authority. However, this figure is higher than the 3.4 percent recorded in January 2018. This is the third straight month that it went down and the lowest for the past 10 months. The highest inflation figure was recorded last September and October at 6.7 percent.
Due to the better than expected inflation, the Bangko Sentral ng Pilipinas may likely maintain rates in its policy review tomorrow. The BSP has been raising interest rates last year to curb inflation. On the other hand, the BSP is wary not to immediately reverse course as they want to review if the tightening moves are absorbed by financial markets and the economy.
The BSP has already cumulatively raised rates by 175 basis points or 1.75 percent last year. They however kept the rates steady last December as inflation rates started to go down.
The BSP expects full-year inflation in 2019 at 3.2 percent which is within the government target of 2-4 percent. Full year 2018 inflation is at 5.2 percent.
The BSP also expects another cut in the reserve requirement ratio (RRR). The RRR is the amount of cash that banks should keep on back of customers deposit. Cutting the RRR would release funds that they can lend which may propel economic growth but, in turn, could increase inflation. The BSP is still monitoring if inflation has indeed settled before they would start cutting RRR.
Market Undecided
The market made another higher high based on an 11-month period. The 15 EMA and 20 SMA are acting as support. The moving averages are bullishly aligned. MACD and RSI are still moving sideways and are consolidating. Support is estimated at 7990 while resistance is expected at 8058.
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