PHL shares fall as inflation surge hits sentiment

STOCKS fell to the 5,800 level again on Tuesday as the quicker-than-expected April Philippine headline inflation and the continuing conflict in the Middle East dampened investor sentiment.

The Philippine Stock Exchange index (PSEi) went down by 0.74% or 44.08 points to close at 5,898.08, while the broader all shares index fell 0.36% or 12.21 points to end at 3,337.4 on Tuesday.

The main index opened the session at 5,929.40, down from Monday’s close of 5,942.16. It reached an intraday high of 5,985.97 but finished at its low for the session.

“The PSEi ended lower after inflation came in above expectations, dampening market sentiment. Investors turned risk-off as they reassessed the potential policy response of the Bangko Sentral ng Pilipinas (BSP). Uncertainty over the central bank’s next move kept buying activity subdued,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Tuesday.

“The local market declined as investors digested the latest inflation print which came in at 7.2% exceeding expectations. Worries over reignited tensions in the Middle East following latest developments with the US sinking Iranian boats in the Strait of Hormuz, and Iran reportedly attacking the United Arab Emirates also dampened market sentiment,” Philstocks Financial, Inc. said in a market note.

Headline inflation surged to 7.2% in April, up sharply from the 4.1% in March and 1.4% a year ago.

This was the fastest headline print since the 7.6% recorded in March 2023. This was also well above the 5.5% median estimate in a BusinessWorld poll of 17 analysts and the central bank’s 5.6%-6.4% forecast for the month.

April was also the second straight month that the consumer price index was above the BSP’s 2%-4% target.

Last month, the Monetary Board hiked benchmark interest rates by 25 basis points for the first time in over two years, bringing the policy rate to 4.5%, as the Middle East war threatens the inflation outlook.

BSP Governor Eli M. Remolona, Jr. has signaled further tightening ahead via “a succession of modest rate hikes” to help temper spiraling prices.

Most sectoral indices closed lower on Tuesday. Mining and oil dropped 2.06% or 360.57 points to 17,082.93; financials fell 1.75% or 31.66 points to 1,775.95; holding firms went down by 0.7% or 31.64 points to 4,483.63; and services decreased 0.67% or 19.32 points to 2,855.71.

Meanwhile, property rose by 0.18% or 3.56 points to 1,924.72, and industrials increased by 0.1% or 9.45 points to 8,856.98.

Decliners outnumbered advancers, 106 to 77, while 63 names closed unchanged.

Value turnover went down to P5.03 billion on Tuesday with 959.88 million shares traded from the P6.52 billion with 1.81 billion shares that changed hands on Monday.

Net foreign buying declined to P38.59 million from P341.56 million. — Ashley Erika O. Jose