PSEi slides to 6,300 level after US inflation report

Philippine shares slid further on Wednesday, dragging the main index back to the 6,300 level, as investor sentiment was soured by inflation concerns in the United States, which could affect the Federal Reserve’s rate-cut cycle.

The bellwether Philippine Stock Exchange index (PSEi) sank by 1.88% or 121.99 points to 6,337.48, while the broader all shares index dropped by 1.55% or 59.02 points to 3,748.25.

This was the PSEi’s lowest close in three weeks or since it finished at 6,330.65 on June 26.

“The local market plunged this Wednesday as investors dealt with the rise in the US’ inflation last June and its implications on the Federal Reserve’s policy outlook. The US latest inflation print may cause the Fed to prolong their pause in their policy rate adjustments,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“Philippine shares succumbed to profit taking as investors digested hotter-than-expected June inflation data (in the US),” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

US consumer prices increased by the most in five months in June amid higher costs for some goods, suggesting tariffs were starting to have an impact on inflation and potentially keeping the Federal Reserve on the sidelines until September, Reuters reported.

The consumer price index (CPI) increased 0.3% last month after edging up 0.1% in May, the Labor Department’s Bureau of Labor Statistics said on Tuesday. That gain was the largest since January, and also reflected higher rental costs.

In the 12 months through June, the CPI advanced 2.7% after rising 2.4% in May. Economists polled by Reuters had forecast the CPI would climb 0.3% and rise 2.6% on a year-over-year basis.

Economists generally expect the tariff-induced rise in inflation to become more evident in the July and August CPI reports, arguing that businesses were still selling merchandise accumulated before President Donald J. Trump announced sweeping import duties in April. Mr. Trump last week announced higher duties would come into effect on Aug. 1 for imports from a range of countries, including Mexico, Japan, Canada and Brazil, and the European Union.

All sectoral indices closed lower on Wednesday. Mining and oil sank by 2.64% or 255.59 points to 9,396.37; holding firms plunged by 2.5% or 141.35 points to 5,494.93; property decreased by 2.28% or 55.61 points to 2,378.79; financials went down by 1.79% or 40.21 points to 2,195.62; services fell by 1.69% or 37.06 points to 2,149.75; and industrials declined by 1.52% or 141.03 points to 9,093.46.

Value turnover surged to PHP 20.78 billion on Wednesday with 3.43 billion shares traded from the PHP 5.9 billion with 1.65 billion shares exchanged on Tuesday.

Decliners bested advancers, 122 versus 67, while 59 names were unchanged.

Net foreign selling increased to PHP 3.47 billion on Wednesday from PHP 322.36 million on Tuesday. — Revin Mikhael D. Ochave with Reuters