Stocks extend decline on faster PHL inflation data

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STOCKS extended their decline on Tuesday following the release of February inflation data that accelerated to its fastest pace in three years.

The bellwether Philippine Stock Exchange index (PSEi) gave up 0.30% or 25.95 points to 8,360.22 today, marking its fifth consecutive day of losses.

The broader all-shares index also closed lower by 0.20% or 10.17 points to 5,033.72.

“Philippine markets closed lower as the lack of any positive developments led investors to sell down the market a fifth consecutive trading day. Investors were also surprised to see that based on the 2006 base, inflation for February came in at 4.5%,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

The Philippine Statistics Authority (PSA) reported that inflation for February — based on 2006 prices — stood at 4.5%, piercing the 2-4% target set by the Bangko Sentral ng Pilipinas (BSP), but within the BSP’s Department of Economic Research’s revised target range of 4-4.8%. The figure also breached the median 4.2% forecast from BusinessWorld’s poll of 14 economists.

This is the fastest inflation since August 2014’s 4.9%.

Using 2012 as the new base year, prices of widely used goods rose by 3.9% in February according to the PSA, picking up from 3.4% in January and 3.1% in February 2017.

“This raises the possibility of a rate hike in the upcoming Monetary Policy meeting this coming March 22,” Papa Securities Corp. Deputy Head of Research Arabelle C. Maghirang said in an e-mail.

International markets in contrast ended in positive territory, as concerns on the potential trade war triggered by US President Donald J. Trump’s statements eased. With this, the Dow Jones Industrial Average jumped 1.37% or 336.70 points to 24,874.76. The S&P 500 index added 1.1% or 29.69 points to 2,720.94, while the Nasdaq Composite index was up 1% to 7,330.71.

Majority of Asian indices tracked the positive movements of US markets as investors also relaxed their concerns on the trade war.

Back home, services was the lone sector that posted gains, climbing 0.55% or 9.65 points to 1,749.39.

Mining and oil recorded the largest decline, shedding 1.64% or 195.62 points to 11,731.05. Property dropped 0.88% or 33.54 to 3,749.67; financials lost 0.34% or 7.63 points to 2,178.24; industrials went down 0.27% or 31.45 points to 11,457.03; while holding firms slipped 0.14% or 11.81 points to close at 8,360.82 today.

Some 4.5 billion issues switched hands, resulting to a value turnover of P8.61 billion. This is higher than the P6.12-billion turnover recorded in the previous session.

Decliners trumped advancers 122 to 93, while 45 names were unchanged.

Foreign investors remained on a selling streak for the 11th day, as net outflows swelled to P737.18 million, against net sales of P290.15 million on Monday. — Arra B. Francia