Stocks slightly rise, buck higher US inflation

Philippine stocks posted slim gains Friday as the US September inflation report boosted expectations of possible US Federal Reserve rate hikes.

The 30-company Philippine Stock Exchange index inched up by 3.28 points, or 0.05 percent, to close at 6,266.34, while the broader all-shares index picked up 1.16 points, or 0.03 percent, to finish at 3,384.57.

Regina Capital and Development Corp. head of sales Luis Limlingan said investors digested the possible implications of the higher-than expected US consumer price index print of the global economy.

US inflation rate came in at 3.7 percent in September 2023, defying market expectations of a slight decrease.

Value turnover reached P5.23 billion, while foreign investors were in a net buying position amounting to around P81.53 million for the day.

Meanwhile, Asian equities went into reverse Friday, snapping a week-long rally, as a forecast-topping US inflation report revived fears the Federal Reserve will hike interest rates again before the end of the year.

Markets have enjoyed a fruitful few days since last week’s jobs report suggested the world’s top economy remained resilient but was not too strong to warrant more central bank tightening to tame prices.

The positivity pushed stocks higher as Treasury yields have come down after a succession of Fed officials lined up to suggest there was little need to lift borrowing costs from their two-decade highs.

However, the mood was darkened Thursday by data showing the consumer prices index rose slightly more than expected in September, highlighting the tough work still to do in the battle against inflation.

Still, the reading caused a spike in Treasury yields—exacerbated by a weak bond auction—and sent stocks tumbling in New York, though they pared some of those losses by the end of the day.

“Much of the ‘good’ work done in the past week in the form of bull flattening of the US yield curve has been undone by the latest US CPI report, which shows in particular still uncomfortably high core service sector inflation,” said National Australia Bank’s Ray Attrill.

While observers said the reading was unlikely to sway the Fed in its decision-making ahead of its next policy meeting