PH stocks dip on higher-than-expected Feb. inflation

The local stock barometer lagged mostly upbeat regional markets on Tuesday as the country’s February inflation report came in higher than consensus at 4.5 percent.

The Philippine Stock Exchange index (PSEi) shed 25.95 points or 0.31 percent to close at 8,360.22.

Except for the services counter, all other sectors declined. The most battered was the mining/oil counter.

Value turnover for the day amounted to P8.6 billion. There was P737.18 million in net foreign selling for the day.

The government announced that the country’s year-on-year headline inflation rate picked up by 3.9 percent in February 2018, higher than the 3.4 percent growth in January 2018 and 3.1 percent during the same period a year ago, using the updated 2012 base year.

Based on the 2006 base year which was used by most forecasters, however, inflation hit 4.5 percent versus the consensus forecast of 4.2 percent.

“Inflation isn’t runaway, but it is unexpected and unexplained. The BSP (Bangko Sentral ng Pilipinas) is signaling a neutral stance and I think that’s a risk approach. Confidence over the BSP’s understanding of this variable could be questioned and drive long-term inflation expectations,” said Jose Mari Lacson, head of research at ATR Asset Management.

There were 122 decliners that edged out 93 advancers while 45 stocks were unchanged.

Ayala Land fell by 1.08 percent while SM Investments, Jollibee, BDO, Metro Pacific, Metrobank, SM Prime, Megaworld and Ayala Corp. all declined.

Outside of the PSEi, there was profit-taking on Waterfront, which gave up 22.22 percent after a stellar rise on Monday.

Vulcan slid by 20.12 percent.

On the other hand, the PSEi’s decline was tempered by the gains eked out by Puregold, which rose by 2.21 percent, as well as JG Summit, which firmed up 1.55 percent after last week’s selloff.