PSEi slips anew as US inflation surges; peso nearly flat

The local bourse finished lower at the start of the week on Monday after another surge in the United States' inflation rate last May, while the peso closed sideways although at the 53-level against the US dollar.

The Philippine Stock Exchange index (PSEi) shed 0.97 percent or 63.03 points, to 6,467.01 points.

All Shares slipped by 1.05 percent, or 37 points, to 3,474.93 points.

All the sectoral indices also finished the day in the negative territory, led by Mining and Oil after it fell 2.64 percent.

It was trailed by Services, 1.76 percent; Holding Firms, 1.65 percent; Financials, 0.77 percent; Industrial, 0.27 percent; and Property, 0.04 percent.

Volume remained thin at 761.72 million shares amounting to PHP5.38 billion.

Decliners led advancers at 146 to 43, while 39 shares were unchanged.

“Philippine shares slid once again after a highly anticipated US CPI (consumer price index) report showed a faster-than-expected rise in prices and consumer sentiment hit a record low,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

The US inflation rate accelerated further to 8.6 percent last May, the highest since 1981. This is faster than the previous month’s 8.3 percent, which has slowed from 8.5 percent last March.

Limlingan also said “traders appeared to be preparing for a more aggressive Fed (Federal Reserve) response in the surge in prices”, noting that the Fed is projected to announce another 25 basis points increase in its key rates during the meeting of the Federal Open Market Committee (FOMC) on June 15.

The Fed’s key rates have been increased by 25 basis points last March and 50 basis points last May in a bid to help tame the surging US inflation rate.

Japeth Tantiangco, senior research analyst at Philstocks Financial Inc. (Philstocks), said market sentiments were dampened by the expected hikes in the Fed rates as a result of another jump in the US inflation rate.

Tantiangco said the weakening of the local currency also contributed to the negative sentiments in the local equities market.

“Trading was tepid amid lingering uncertainties with net value turn-over posting PHP5.12 billion, below the year-to-date average of PHP6.82 billion,” he said, noting also the net foreign selling during the day.

Meanwhile, the peso finished the day sideways at 53.3 against the US dollar after depreciating to 53.00 last Friday.

It opened the day at 53.1 and traded between 53.3 and 53.1. The average level for the day stood at 53.249.

Volume reached USD685.2 million, lower than the previous session’s USD949.3 million.

Source: Philippines News Agency

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