Share prices ended lower Thursday as risk aversion hit investors following the release of inflation data. The peso closed up.
Claire Alviar, analyst at Philstocks Financial Inc., said investors are getting concerned that the Bangko Sentral ng Pilpinas (BSP) will be aggressive in its upcoming meeting and might raise interest rates by another 50 basis points.
“Other than the rate hike, investors were also concerned about the high inflation in the country that triggers the BSP to tighten the monetary policy. The January inflation came in higher than the forecast of the BSP. This shows robust demand especially with the strong labor data,” Alviar said.
“On the upside, strong demand may drive the revenues of most firms, however, margins may decline amid high inflation particularly if the BSP will further hike interest rates,” she added.
The Philippine Stock Exchange index was down 80.29 points, a 1.16 percent drop to 6,842.79.
The broader all shares index was down 31.51 points or 0.86 percent to 3,643.50.
Losers edged gainers 112 to 81 with 45 stocks unchanged. Trading turnover reached P5.62 billion.
The peso closed at 54.45 to the dollar, up from 54.80 on Wednesday.
The currency opened at 54.86 and hit a high of 54.44 and a low of 54.955. Trading turnover reached $1.38 billion.
Currencies in Asia’s emerging markets slipped on Thursday, as risk sentiment was dampened by US Federal Reserve speakers echoing Chair Jerome Powell’s rhetoric on higher interest rates for longer.
Cautious sentiment prevailed overnight on Wall Street after Fed officials said more interest rate rises were on the cards.
Fed Governor Christopher Waller said the US central bank’s battle to reach its 2 percent inflation target “might be a long fight”.
“The cautious sentiment that we see in the Asian markets reflects continued concerns about the Fed,” said Irene Cheung, senior Asia strategist at ANZ in Singapore.
Most actively traded SM Investments Corp. was down P14 to P895. SM Prime Holdings Inc. was down P0.80 to P37.50. Metropolitan Bank and Trust Co. was up P0.40 to P60.20. Ayala Land Inc. was down P0.10 to P29.10. Ayala Corp. was down P14 to P700. International Container Terminal Services Inc. was down P0.60 to P211.40. SP Energy Corp. was up P0.05 to P1.59. Metro Pacific Investments Corp. was up P0.08 to P4.23. Figaro Coffee Group Inc. was up P0.02 to P1.04. Robinsons Land Corp. was down P0.12 to P16.30.
