SHARES retreated on Wednesday due to inflation concerns here and abroad as well as cautiousness ahead of the release of latest gross domestic product data.

The 30-member Philippine Stock Exchange index (PSEi) went down 34.60 points or 0.47% to close at 7,253.61 on Wednesday, while the broader all shares index went down by 8.37 points or 0.21% to 3,856.11.

“Market sentiment took a hit from inflation worries as Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno, in his open letter to President Rodrigo R. Duterte, said the inflation may remain elevated this 2022,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

The risk to the inflation outlook is slightly on the upside for 2022, Mr. Diokno said.

“These risks are mostly associated with a prolonged shortage in domestic pork supply, along with higher global commodity prices due to improving global demand amid lingering supply-chain bottlenecks,” Mr. Diokno said in an open letter to President Rodrigo R. Duterte dated Jan. 18.

A Development Budget Coordination Committee resolution requires the BSP to issue an open letter to the President to explain why actual inflation deviated from the target in a given year.

Headline inflation averaged 4.5% in 2021, beyond the 2-4% target set by the BSP. Inflation was only within target for two months in 2021 — in December and in July, when it was at 4%.

“The bourse finished lower as investor sentiment remained weak ahead of the US Fed’s monetary policy meeting and as inflation concerns linger both locally and abroad,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message.

The US Federal Reserve was scheduled to announce its policy decision after local market hours.

First Metro Investment Corp. Head of Research Cristina S. Ulang said there were market jitters ahead of the release of fourth quarter and full-year 2021 gross domestic product data on Thursday after growth in the July-September period was revised lower.

The Philippine Statistics Authority on Wednesday said the economy grew 6.9% in the third quarter of 2021, slower than the 7.1% initially reported.

Most sectoral indices ended in the red except for mining and oil, which gained 114.79 points or 1.11% to end at 10,415.23.

On the other hand, financials declined 16.61 points or 1.01% to 1,620.88; property dropped 17.80 points or 0.55% to 3,180.07; services went down 8.01 points or 0.40% to 1,968.22; holding firms lost 13.63 points or 0.19% to 7,150.13; and industrials fell 13.64 points or 0.13% to close at 10,474,41.

Value turnover increased to P6.41 billion with 1.5 billion issues traded from the P6.28 billion with 1.26 billion shares that switched hands on Tuesday.

Decliners beat advancers, 102 against 78, while 60 names closed unchanged.

Net foreign selling increased to P870.31 million from the P722.43 million logged the previous trading day. — M.C. Lucenio