Market Recap
Philippine share prices plunged as faster-than-expected inflation rate in August triggered a sell-off, and as worries over persistent trade conflicts curbed investor appetite for riskier assets.
The benchmark PSEi plummeted 129.55 points or 1.64% to 7,752.27 at the closing bell. The index plunged as low as 169.93 points or 2.16%. Meanwhile, the broader All Shares nosedived 63.84 points or 1.33% to 4,730.74.
The market’s dive is attributed to the above-expected inflation along with fears that this may further dampen the country’s economic growth.
Inflation clocked in at 6.4% in August, the fastest in over nine years since it came in at 6.6% in March 2009.
It is faster than the 5.9% forecast of the central bank and Department of Finance’s expectation that it will settle at 5.88%.
The latest consumer price index figure will likely add more pressure to another rate hike, which could be as much as 50 basis points.
Skyrocketing inflation has compelled the central bank to raise key policy rates thrice so far this year for a total of 100 basis points.
Meanwhile, the US-Canada talks are due to resume today and this keeps trade issues at the forefront, with a wait-and-see mood prevailing in the equity markets.
Discussions between the United States and Canada were expected to resume on Wednesday after the last round ended on Friday with no deal to revamp the North American Free Trade Agreement (NAFTA), cooling investor confidence.
Keeping investors nervous, fresh US tariffs on $200-bil worth of Chinese goods are expected to take effect after a public comment period ends on Sept. 6.
More than 1.690-bil shares valued at P5.888-bil, changed hands. Market breadth was negative, with decliners beating advancers, 146 to 51, and 38 issues were unchanged.
Gainers: RLC (+1.16%), TEL (+0.56%), EDC (+0.14%), PCOR (+0.11%)
Laggards: BDO (-5.08%), JGS (-3.81%), MPI (-3.79%), MEG (-2.58%), SMPH (-2.45%)
