The stock market started the week on a sluggish note as investors remained cautious ahead of the release of the inflation data for August.
The Philippine Stock Exchange Index (PSEi) shed 16.61 points, or 0.25 percent, to close on Monday at 6,676.04 as Friday’s equities selloff at Wall Street curbed risk-taking across most markets in the region.
“Historically, September isn’t a good month for local stocks and this is also true for the whole of third quarter,” said Joseph Roxas, president of local stock brokerage Eagle Equities Inc. “Aside from that, there’s really a lot of problems in the world today, including inflation, which remains high.”
However, Roxas said the PSEi’s support level at 6,600 seemed to be holding well.
High food and fuel prices and tighter financial conditions amid the prolonged conflict in Ukraine have dimmed global economic recovery prospects. In the Philippines, the inflation rate spiked to 6.4 percent in July from just 3 percent at the start of this year, breaching the 2-4 percent target band of the Bangko Sentral ng Pilipinas (BSP), which had no choice but to switch to hawkish mode.
However, the 175-basis point cumulative interest rate hike by the BSP since June this year is still no match for US Federal Reserve’s total rate hike of 225 basis points. Meanwhile, the peso hit another record low (See related story on page B1), which is a disincentive especially to foreign investors as local currency depreciation also reduces the value of their local assets.
The market forecasts that inflation rate will average 4.9 percent this year.
The government is set to release today, Sept. 6, its latest inflation report.
On Monday, the local market was weighed down by the industrial, holding firms, property and mining/oil counters, which all declined by less than 1 percent.
Losses were tempered by the financial counter, which advanced by 1.11 percent.
Value turnover was a meager P4.19 billion, with modest net foreign purchases of P61.4 million.
Decliners outnumbered advancers, 101 to 75, while 54 companies closed unchanged. INQ