THE MAIN INDEX dropped to the 6,300 level again on Tuesday as investors preferred to stay on the sidelines before the release of May Philippine inflation data on Wednesday.
The benchmark Philippine Stock Exchange index (PSEi) slumped by 1.3% or 84.32 points to end at 6,386.42 on Tuesday, while the broader all shares index dropped by 0.92% or 32.01 points to finish at 3,439.04.
“The local bourse plunged by 84.32 points (1.3%) to close at 6,386.42. This decline reflects negative investor sentiment due to concerns about rising inflation and a weakening peso,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“Inflation for May, to be released [on Wednesday], is expected to exceed the government’s target range of 2% to 4%. For Philstocks, we expect inflation to settle at 4.1%,” Ms. Alviar added.
A BusinessWorld poll of 16 analysts yielded a median estimate of 4% for the May consumer price index (CPI), within the Bangko Sentral ng Pilipinas’ (BSP) 3.7-4.5% forecast for the month.
If realized, May inflation would be faster than 3.8% in April but slower than the 6.1% print a year earlier. This would also mark the sixth straight month that the CPI was within the central bank’s 2-4% annual target.
“Philippine shares concluded trading Tuesday in the red following BSP Governor Eli M. Remolona, Jr.’s statement about the potential for cutting the benchmark rate ahead of the Federal Reserve,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
Mr. Remolona on Tuesday reiterated that the benchmark rate could be cut ahead of the US Federal Reserve, keeping pressure on the peso against the dollar amid expectations US rates will stay higher for longer, Reuters reported.
The central bank chief said the benchmark policy rate — currently sitting at a 17-year high of 6.5% — could be cut before the Fed starts its easing cycle, repeating previous comments as policy makers gain more confidence about reining in inflation pressure.
Mr. Remolona said the BSP is already less hawkish than before as inflation could settle within its 2-4% comfort range sometime this year after staying above the top end of that target for two consecutive years.
All sectoral indices closed lower. Holding firms dropped by 2.49% or 142.48 points to 5,561.56; mining and oil went down by 1.29% or 120.90 points to 9,215.60; property declined by 1.23% or 30.29 points to 2,421.90; industrials retreated by 0.95% or 87.43 points to 9,032.47; services inched down by 0.64% or 12.68 points to 1,942.10; and financials lost 0.28% or 5.69 points to end at 1,980.54.
Value turnover dropped to P6.01 billion on Tuesday with 500.66 million shares changing hands from the P6.78 billion with 939.03 million issues traded on Monday.
Decliners beat advancers, 128 versus 80, while 32 issues closed unchanged.
Net foreign selling rose to P1.32 billion on Tuesday from P571.39 million on Monday. — RMDO with Reuters
This article originally appeared on bworldonline.com