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Business

Stocks follow downturn in Asian markets

Iris Gonzales - The Philippine Star
Stocks follow downturn in Asian markets
The benchmark Philippine Stock Exchange index dropped by 103.56 points or 1.56 percent to finish at 6,532.30 while the broader All Shares index fell by 40.76 points or 1.15 percent to end at 3,517.21.
AFP / File

MANILA, Philippines — Local stocks followed other Asian emerging markets lower yesterday as investors worried over sky-high US inflation data solidifying the case for the Federal Reserve’s planned policy tightening.

The benchmark Philippine Stock Exchange index (PSEi) dropped by 103.56 points or 1.56 percent to finish at 6,532.30 while the broader All Shares index fell by 40.76 points or 1.15 percent to end at 3,517.21.

Even the reported 8.3 percent growth in gross domestic product (GDP) in the first quarter, which was higher than the consensus 6.7 percent estimate, failed to lift sentiment, “as investors remained cautious as high inflation and GDP growth could push the Bangko Sentral ng Pilipinas to hike interest rates in their meeting next week,” AB Capital Securities said in a commentary.

“With GDP now back to pre-COVID levels and with inflation accelerating, we fully expect (the Philippine central bank) to hike policy rates at the May 19 meeting next week,” said analysts at ING. Focus is now on the details of presumptive president Ferdinand Marcos Jr.’s economic team.

“The impact we are seeing is not specifically led by the domestic factors, because if you see, globally, this inflation concern is still there. And I think yesterday’s CPI number has provided that trigger,” said Gaurang Somaiya, an analyst at Motilal Oswal.

US inflation in April saw a slight decline to 8.3 percent, but remained “unacceptably hot,” according to analysts at DBS. The number still came in above market expectations, causing choppy trade on Wall Street overnight.

At the PSE, the sectoral gauges were a sea of red once more, with property and financials among the biggest decliners.

Market breadth was heavily negative, with 128 losers as against 70 gainers, while 48 stocks were unchanged.

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