PSEi slides as investors shrug off inflation data

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By Arra B. Francia, Reporter

LOCAL equities fell amid lackluster trading on Friday following the release of September inflation data which revealed a new nine-year high.

The benchmark Philippine Stock Exchange index (PSEi) traded flat for most of the day before finally registering losses of 0.21% or 15.14 points to 7,078.20 by closing bell. The broader all shares index also slipped 0.16% or 6.98 points to 4,363.36.

“The local market traded flat with very low value turnover as inflation turned out to be a non-event for September… Investors are now in a wait-and-see mode as they need another cue to make sure that CPI has started to peak,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

The Philippine Statistics Authority reported on Friday morning that the consumer price index for September accelerated to 6.7%, faster than August’s 6.4%. The figure is slightly lower than the Bangko Sentral ng Pilipinas’ projection of 6.8%, but falls within its 6.3-7.1% target band.

This marks the fastest increase in consumer prices since February 2009’s 7.2%. The PSA attributed this to the heavily-weighted food and non-alcoholic beverages index which shot up to 9.7% last month.

Turnover further thinned to P4.08 billion after some 1.13 billion issues switched hands, compared to the previous session’s P4.31 billion. Foreign investors also continued to exit the market, with net sales widening to P885.37 million from Thursday’s P423.84 million.

“With an inflation figure that fell below expectations still failing to resuscitate the PSEi and halt the outflow of foreign funds, we should remain vigilant next week if the overall negative sentiment continues,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an email.

Regina Capital’s Mr. Limlingan added there were no catalysts that could have pushed up the market, as 10-year US Treasury yields likewise hovered at around 3.2%.

With bond yields rising, the Dow Jones Industrial Average plunged 0.75% or 200.91 points to 26,627.48. The S&P 500 index dropped 0.82% or 23.9 points to 2,901.61, and the Nasdaq Composite index lost 1.81% or 145.57 points to 7,879.51.

Most Asian indices also ended in negative territory, taking cues from US Treasury yields’ seven-year high. MSCI’s broadest index of Asia Pacific shares ex Japan slid 0.3%, Japan’s Nikkei 225 dropped 0.8%, while the Hang Seng index slowed 0.19%.

Back home, four sectoral indices declined. Holding firms gave up 0.66% or 46.36 points to 6,951.46, followed by industrial which slumped 0.53% or 55.66 points to 10,405.15. Mining and oil dipped 0.41% or 35.27 points to 8,652.67, while financials went down 0.33% or 5.18 points to 1,574.96.

On the other hand, property gained 0.64% or 22.25 points to 3,487.97, while services added 0.21% or 3.14 points to 1,503.83.

Decliners outpaced advancers, 129 to 66, while 40 names ended flat.