MANILA, Philippines — Local shares faced a bloodbath on Tuesday to sink below the 7,000-level while the Philippine peso continued to fall to over two-year lows, as rising oil prices amid the Russia-Ukraine war fan fears of red-hot inflation.
The Philippine Stock Exchange index skidded 4.26% — its biggest single-day loss so far this year — to close at 6,977.73 on Tuesday. The broader All Shares index was scalped 3.3% as most of the sub-indices incurred losses of 3-5%.
On the flip side, shares in the mining and oil index were alone in the green, gaining 3.62% amid rallying fuel prices.
Local shares tracked a broader sell-off in Asia after a rout on US markets. Tokyo, Hong Kong, Singapore, Seoul, Wellington and Bangkok all lost more than 1%, while Shanghai and Taipei were off more than 2%. Sydney, Jakarta and Mumbai were also in the red.
"Philippine stocks plunged yet again on worries that the rising energy prices caused by the Russia-Ukraine war would slow the economy and drive inflation hotter," Luis Limlingan of Regina Capital said in a Viber message.
April Lee Tan, head of research at COL Financial, agreed with Limlingan's assessment. "Still the Ukraine war. Asian market, and the future of US market are weak while commodity prices continue to go up," Tan said in a Viber message.
Local oil companies enforced a big-time price hike on Tuesday amid a war in Europe that’s lifting global energy prices to multi-year highs. As it is, the Philippines, a net oil importer, is already grappling with rising fuel costs, which could stoke inflation at a time the consumption-reliant economy is just getting its groove back after a pandemic-led meltdown.
Worsening the oil price hike at home is a weak peso, which could make fuel imports more costly for the Philippines. On Tuesday, the local unit lost 14 centavos to close at P52.32 versus the US dollar, sustaining its slump to levels not seen since 2019.
On Tuesday, foreign investors sold P850.32 million more shares than they bought in the stock market. A total of 2.35 billion local shares, valued at P12.16 billion, switched hands during the trading. — with a report from AFP