PSEi dips as inflation worries weigh on sentiment

Philippine shares extended their decline on Tuesday, as concerns over stubborn inflation and the timing of monetary easing continued to weigh on investor appetite.

The Philippine Stock Exchange index (PSEi) slipped 0.18% or 11.46 points to close at 6,128.89, while the broader all-share index edged down 0.06% or 2.52 points to 3,681.03.

“Investor confidence appears to be waning as no clear positive catalyst is in sight,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message. “Sentiment remains uncertain with inflation expectations staying elevated, alongside forecasts that the BSP (Bangko Sentral ng Pilipinas) may delay rate cuts until next year instead of within this year.”

A BusinessWorld poll of 16 analysts yielded a median estimate of 1.3% for August inflation, from 0.9% in July and 3.3% a year earlier. This could mark the sixth straight month inflation remained below the BSP’s 2-4% target. The Philippine Statistics Authority will release the official data on Sept. 5.

Global cues also weighed on local trading. “Wall Street was closed [on Sept. 1] due to Labor Day. Last Friday, major indexes gave back a portion of their recent gains, with the market’s focus now squarely on the anticipated August job report,” Mr. Limlingan said, adding that uncertainty over the US Federal Reserve’s next policy steps is fueling caution.

Alfred Benjamin R. Garcia, research head at AP Securities, Inc., noted that banking stocks bore much of Tuesday’s decline as they extended their downtrend.

Expectations of narrowing margins from recent rate cuts dragged the sector, he said. “Sentiment also remained weak against the backdrop of global economic uncertainty and geopolitical instability in Southeast Asia,” Alfred Benjamin R. Garcia, research head at AP Securities, Inc., said in a Viber message.

Foreign investors turned net sellers, unloading PHP 368.84 million in local shares compared with PHP 148.55 million the previous day.

Sectoral performance was mixed, with three indices rising and three declining. Mining and oil climbed 2.49% or 260.05 points to 10,674.61, property rose 0.26% or 6.52 points to 2,452.26, and industrials added 0.04% or 3.88 points to 9,056.93.

On the other hand, financials dropped 0.78% or 16.39 points to 2,062.93, services slipped 0.16% or 3.66 points to 2,180.83 and holding firms dropped 0.08% or 4.22 points to 5,044.74.

Value turnover increased to PHP 5.58 billion with 1.16 billion shares traded, up from PHP 4.21 billion with 1.15 billion shares on Monday. Losers beat winners, 111 to 84, while 59 stocks were unchanged. — Alexandria Grace C. Magno