Local stocks retreated yesterday as investors engaged in profit-taking due to uncertainty surrounding the timing and pace of rate cuts.

The Philippine Stock Exchange index (PSEi) closed at 6,520.75, down by 0.52 points or 0.008 percent.

On the other hand, the broader All Shares index rose by 1.7 points or 0.05 percent, closing at 3,434.41.

Sectoral gauges showed a mixed performance, with mining and oil, holding firms, and services closing in positive territory. On the other hand, financials, industrial, and property sectors ended in the red.

Luis Limlingan of Regina Capital said that Philippine shares took a breather from the recent rally as investors sought more cues on the rate cuts from the US Federal Reserve in the new year.

Unicapital Securities said that the PSEi is undergoing short-term corrective measures as investors decide to book some profits. The index is poised to test key resistance levels at 6,600.

'While we may expect short-term corrective pressures due to profit-taking, in our view, the index is poised to maintain its upward momentum, buoyed by US markets that have sustained their trend to historical highs,' Unicapital said.

Meanwhile, in other parts of Asia, shares mostly advanced after Wall Street ticked higher amid hopes that Japan's moves to keep interest rates easy for investors could augur similar trends in the rest of the world.

With inflation down from its peak two summers ago and the economy still growing, the rising expectation is for the Federal Reserve in 2024 to pivot away from its campaign to hike interest rates dramatically.

The hope is the Fed can pull off what was earlier seen as a nearly impossible tightrope walk, by first getting inflation under control through high interest rates and then cutting rates before they push the economy into a recession.

A report on Tuesday showed the housing industry appears to be in stronger shape than expected. Homebuilders broke ground on many more homes in November than expected, roughly 200,000 more at a seasonally adjusted annualized rate.

Wall Street's big recent moves also have critics saying the rally looks overdone.

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