By Arra B. Francia, Reporter
STOCKS surged on Tuesday as investors cheered slower-than-expected May headline inflation data.
The 30-company Philippine Stock Exchange index (PSEi) jumped 1.40% or 106.15 points to close at 7,685.76. The all-shares index likewise climbed 1.06% or 49.11 points to 4,664.29.
“We’ve been watching the market and technically it was oversold for the past few weeks… People were worried about how inflation was going to be, because oil prices went up and that’s inflationary pressure. But with the numbers out now and they are lower than expected, then it is good,” Summit Securities, Inc. President Harry G. Liu said in a phone interview.
The Philippine Statistics Authority reported Tuesday, June 5, that the average increase in prices of widely used goods and services stood at 4.6% in May. While this is a fresh five-year high, it is lower than the Department of Finance’s 4.9% estimate and was at the lower end of the Bangko Sentral ng Pilipinas’ own forecast of 4.6-5.4%.
Mr. Liu noted inflation is expected to slow down once oil prices in the world market go down as well.
“Thinking ahead, if oil prices go down — and it will technically go down which I expect to be $60 — if that happens, then the market will appreciate that,” the analyst said.
Aside from inflation, Regina Capital Development Corp. Managing Director Luis A. Limlingan also attributed the main index’s increase to positive sentiment in the US.
“Philippine stocks rallied as the US counterparts did as traders appeared to shrug off global trade tensions and focused on a favorable economic backdrop instead,” Mr. Limlingan said in a mobile message.
Overnight, the Dow Jones Industrial Average firmed up 0.72% or 178.48 points to 24,813.69. The S&P 500 index rose 0.45% or 12.25 points to 2,746.87, while the Nasdaq Composite index gained 0.69% or 52.13 points to 7,606.46.
Locally, all sectoral indices ended in positive territory, led by holding firms which recorded a 2.31% gain or 173.08 points to 7,650.95. Services followed with an increase of 1.58% or 23.38 points to 1,502.62, while mining and oil went up 1.10% or 111.34 points to 10,152.53.
Industrials rose 0.92% or 98.43 points to 10,756.26; financials gained 0.82% or 15.50 points to 1,887.77; and property added 0.05% or 2.21 points to 3,802.02.
A total of 1.98 billion issues switched hands valued at P5.41 billion, mostly flat from Monday’s P5.48-billion turnover.
Advancers outpaced decliners, 112 to 84, while 53 issues were unchanged.
Foreign investors remained as sellers, unloading a net P673.32 million worth of Philippine equities on Tuesday, higher than the P240.53-million outflow recorded in the previous session.
In the medium term, Summit Securities’ Mr. Liu said he continues to expect the market to consolidate within the 7,500 to 7,800 range.