Stocks snap 2-day rally on inflation spike

MANILA, Philippines — The stock market’s two day-winning streak was cut short yesterday as share prices plunged after investors digested the country’s headline inflation in April.

The Philippine Stock Exchange index (PSEi) fell 1.59 percent or 109.02 points, dropping below the 6,800 mark to finish at 6,759.90.

The broader All Share index also ended the week in negative territory, plummeting by 1.13 percent or 41.46 points to settle at 3,621.70.

“The PSE index slumped following global stocks, and as Philippine inflation hits a three-year high of 4.9 percent in April 2022, past the two to four percent target range of the government, pushed up by rising oil and electricity prices,” AB Capital Securities said in a commentary.

Philstocks Financial analyst Japhet Tantiangco said the local market also followed the negative cues from Wall Street’s overnight decline.

“This came as interest rates in the US rose with their 10-year bond yield breaching the three percent mark,” he said.

All sectors were in the red, except for services, which managed to gain 0.47 percent.

Market breadth was negative as decliners trumped advancers, 107 to 60, while 61 stocks did not change.

Value turnover stood at P5.95 billion. Foreigners were net sellers with outflows amounting to P851.71 million.

Equities in the region were battered too, as Southeast Asian economies have begun mirroring the Fed and hiking interest rates to tackle price pressures exacerbated by the Russia-Ukraine conflict — and supporting economic growth asthe region emerges from a pandemic-driven downturn.

Regional markets also came under pressure following the rise in US Treasury yield which breached the three percent mark after data showed that labor market conditions in the US continued to tighten.

Oil prices also continued their ascent on supply concerns ahead of an imminent European Union embargo on Russian oil.