Index snaps win streak on higher inflation forecast

MANILA, Philippines — After a four-day upswing, stocks succumbed to selling pressure as investors anticipate February inflation to breach the upper end of the government’s target.

The benchmark Philippine Stock Exchange index (PSEi) closed at 6,882.49, down 60.27 points or 0.86 percent.

Likewise, the broader All Shares index slipped 23.54 points or 0.56 percent to end at 4,163.22.

Most of the subsectors also finished in negative territory except for the industrial index.

Total value turnover reached P7.1 billion. Market breadth was negative, 119 to 110, while 40 issues were unchanged.

Foreign funds were net sellers for the 12th consecutive day.

In a market commentary, AB Capital Securities said the local market snapped its win streak as inflation is expected to breach the central bank’s target two to four percent band.

“The PSEi declined, ending its four-day gain streak as selling pressure picked up and trading volumes decreased. The rally that we have been seeing in the last few days is confirmed to be more of a correction after several weeks of decline instead of higher valuations due to the rollout of vaccines or easing of restrictions. The market’s general trend is still sideways as the sentiment remains cautious due to the uncertainty of the economy’s recovery. This sideways trend will continue until investors are convinced that higher valuations are justified,” said Chris Mangun of AAA Equities.

Luis Limlingan of Regina Capital added that local shares finished lower after benchmark bond yields marched higher and fresh economic data suggested a more tepid rebound from the pandemic.