PSEi inches lower as inflation hits six-month high

SHARES went down on Tuesday as inflation quickened last month due to the spike in commodity prices due to the crisis in Ukraine.

The benchmark Philippine Stock Exchange index (PSEi) went down by 7.14 points or 0.10% to close at 7,156.07 on Tuesday, while the broader all shares lost 0.11 point to close at 3,797.43.

“The local bourse pulled back this Tuesday as the surge in our inflation rate from February’s 3% to March’s 4% dampened investors sentiment. This shows that many investors are still on the sidelines due to the lingering uncertainties, from the Russia-Ukraine War, to the US’ inverting yield curve, to the nearing national elections,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Philippine stocks ended lower on Tuesday, trading in the red throughout the session amid fears of higher inflation in the months ahead after March inflation hit 4%. Inflationary pressures caused by the Russian invasion of Ukraine are likely to drag on the county’s growth outlook,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a Viber message.

Inflation rose to a six-month high in March as food, utilities, and transport costs increased amid a spike in global oil prices due to Russia’s invasion of Ukraine.

Preliminary data released by the Philippine Statistics Authority on Tuesday showed headline inflation hit 4% last month, faster than the 3% in February’s 3% but slightly slower than the 4.1% print in March last year.

This matched the 4% print in October last year and is the fastest since the 4.2% inflation in September 2021. It also matched the 4% median in a BusinessWorld poll conducted last week and was near the upper end of the 3.3-4.1% forecast of Bangko Sentral ng Pilipinas (BSP) for the month.

For the first quarter, inflation settled at 3.4%, within the BSP’s 2-4% target for the year.

The majority of sectoral indices ended in the red except for financials, which climbed by 14.39 points or 0.85% to 1,699.15, and mining and oil, which rose by 12.93 points or 0.10% to 12,570.41.

Meanwhile, property declined by 19.70 points or 0.59% to 3,313.88; industrials fell by 23.92 points or 0.24% to 9,800.41; holding firms lost 11.17 points or 0.16% to 6,798.98; and services dropped 1.59 points or 0.08% to end at 1,939.81.

The MidCap index improved by 0.99 point or 0.08% to close at 1,205.24 while the Dividend Yield advanced by 0.47 point or 0.03% to close at 1,708.30.

Value turnover increased to P4.17 billion with 1.12 billion shares changing hands from the P3.87 billion with 1.33 billion issues seen on Monday.

Advancers narrowly beat decliners, 88 versus 82, while 57 names closed unchanged.

Foreigners turned sellers with P181.09 million in net outflows versus the P202.58 million in net purchases seen the previous trading day.

For the remainder of the week, Timson Securities, Inc. Trader Darren Blaine T. Pangan placed the PSEi’s support at 6,800 and resistance at 7,510. — Luisa Maria Jacinta C. Jocson