Inflation surge, US-China trade row weigh on sentiment

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FRIDAY saw local equities cut short a slight recovery earlier in the session as the country’s quickening inflation and a worsening US-China trade row dampened investor confidence.

The Philippine Stock Exchange index (PSEi) dropped 76.5 points or 0.95% to close 7,945.66, while the all-shares index gave up 35.95 points or 0.73% to finish 4,828.5.

PSEis weekly fall persisted, at 0.315% from 7,970.80 last March 23 — there was no trading on March 30, Good Friday.

PSEi had opened Friday at 8,018.77 — lower than Thursday’s 8,022.16 finish — peaked at 8,047.70 and hit a low of 7,901.79.

Four of the six sectoral indices finished with losses.

“Market sentiment is apparently bearish as the rapid rise of local inflation scares investors which indicates an overheating economy,” Jervin S de Celis, equities trader at Timson Securities, Inc., said when sought for comment, while noting “continuous net foreign selling as investors pull out investments from our markets to safer havens or US treasuries.”

The central bank on Thursday issued its most hawkish remarks yet in recent years, saying it was preparing a “measured” policy response as headline inflation clocked its fastest pace in at least five years at 4.3% in March — piercing an official 2-4% full-year 2018 target range.

Luis T. Limlingan, Sales head at Regina Capital Development Corp., noted separately that “shares in the Philippines looked to trade south after another round of tariff (increase for China goods) was announced by the US.”

This, even as Wall Street was upbeat, with the Dow Jones Industrial Average up 0.99% at 24,505.22, the Nasdaq Composite Index up 0.49% at 7,076.55 and the S&P 500 up 0.69% at 2,662.84.

PSE’s Asia-Pacific peers, however, were a mixed bag, with Japan’s Nikkei 225 and TOPIX Index, South Korea’s KOSPI, Shanghai Composite Index and the Jakarta Composite shedding 0.36%, 0.31%, 0.33%, 0.15% and 0.13%, respectively, while Hong Kong’s Hang Seng Index, the Straits Times Index and the MSCI AC Asia Pacific added 1.11%. 1.08% and 0.50%, respectively.

At home, only two sectoral indices gained on Friday: mining and oil by 69.24 points or 0.61% to 11,307.15, and services by 6.62 points or 0.4% to 1,660.43.

The rest fell: property by 51.71 points or 1.39% to 3,644.5, financials by 25.42 points or 1.24% to 2,024.41, industrials by 138.91 points or 1.23% to 11,158.48 and holding firms by 43.4 points or 0.54% to 7,987.62.

The list of Friday’s 20 most active stocks saw:

• 12 that lost, led by Jollibee Foods Corp. which dropped 0.71% to P278 apiece; SM Prime Holdings, Inc. that gave up 1.45% at P33.90; BDO Unibank, Inc. that fell by 3.03% to P134.60; Universal Robina Corp. that went down 4.67% to P143; Ayala Land, Inc. that declined by 1.80% to P41 and GT Capital Holdings, Inc. that dipped by 0.70% to P1,140 each;

• and seven others that gained, led by PLDT, Inc. that went up 0.88% to P1,487 apiece; SM Investments Corp. that edged up by 0.21% to P976; Ayala Corp. that increased by 1.43% to P919 and Bloomberry Resorts Corp. that rose by 3.53% to P13.50 each.

Friday saw 2.368 billion shares worth PP7.585 billion change hands compared to Thursday’s 4.054 billion worth P5.853 billion.

Foreign investors remained predominantly bearish for the second straight day, resulting in net selling of P482.692 million that was more than double Thursday’s 211.641 million. — interviews by PPCM