Main index drops further on inflation, trade data

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LOCAL SHARES continued to decline on Tuesday as the government reported slower inflation in September, which investors took as a signal of a challenged economy.

The 30-member Philippine Stock Exchange index (PSEi) fell 28.31 points or 0.47% to close at 5,910.64, while the broader all shares index slid 15.09 points or 0.42% to end at 3,543.73.

“Economic concerns extended the local market’s losses today…,” Japhet Louis O. Tantiangco, a senior research analyst at Philstocks Financial, Inc., said in a text message on Tuesday.

“The inflation slowdown this past September reflecting the challenged consumer demand, and the Bangko Sentral ng Pilipinas’ 7 to 9 percent contraction forecast for the 2020 GDP (gross domestic product) raised worries over the local economy,” he added.

Headline inflation eased to 2.3% in September, down for the second straight month and the slowest since the 2.1% print in May, data reported by the Philippine Statistics Authority (PSA) on Tuesday showed. The September print is slower than August’s 2.4% but faster than September 2019’s 0.9%.


The slowdown came as Metro Manila and key cities remain under a relaxed lockdown. The PSA said it expects inflation to average 2.4-2.5% for the remaining months of the year.

The PSA also reported manufacturing output on Tuesday, which fell by 9.9% in August, logging its sixth straight month of decline.

These economic indicators pulled the PSEi down for a second consecutive day. It was dragged further by continued net foreign selling that reached P863.7 million on Tuesday, albeit lower than Monday’s net outflow worth P1.09 billion.

“So far, our local market’s net foreign outflows is already running on an 18-day streak averaging P678.9 million per day,” Mr. Tantiangco said.

Negative sentiment among foreign investors can be attributed to the health of US President Donald Trump and the possibility of additional fiscal stimulus in the world’s largest economy, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

Mr. Trump tested positive for the coronavirus disease 2019 (COVID-19) last week but claimed in a tweet on Tuesday that he is “feeling really good.” US stocks closed higher on Monday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices gained 1.68%, 1.80% and 2.32%, respectively.

Back home, sectoral indices all posted declines on Tuesday: industrials lost 112.19 points or 1.41% to 7,837.74; financials shed 12.99 points or 1.11% to 1,153.53; mining and oil shaved off 23.96 points or 0.40% to 5,839.27; holding firms erased 23.66 points or 0.38% to 6,133.04; property slid 4.58 points or 0.16% to 2,752.14; and services dipped 0.81 point or 0.05% to 1,463.01.

Some 2.09 billion issues valued at P8.08 billion switched hands on Tuesday versus the 2.73 billion issues worth P6.46 billion in the last session. Decliners outpaced advancers, 144 against 57, while 53 names ended unchanged. — Denise A. Valdez