The stock market slumped Tuesday, weighed down by rising inflation that hit a five-year high of 5.7 percent in July.
The Philippine Stock Exchange Index tumbled 91.46 points, or 1.2 percent, to 7,725.85 on a value turnover of P5.2 billion. Losers edged gainers, 103 to 99, with 38 issues unchanged.
The July inflation was significantly faster than 2.4 percent recorded a year ago, data from the Philippine Statistics Authority showed Tuesday. The July figure brought the average inflation rate in the first seven months to 4.5 percent, above the government’s target range of 2 percent to 4 percent for the year.
Higher inflation eats into the budget of households and dampens consumer spending.
The higher inflation may prompt the Bangko Sentral ng Pilipinas to raise interest rates again when the Monetary Board meets Thursday.
“We will consider all the latest data updates in determining the strength of our follow-through response in the upcoming policy meeting of the MB this Thursday,” Bangko Sentral Governor Nestor Espenilla Jr. said.
BDO Unibank Inc., the biggest lender in terms of assets, declined 4.1 percent to P129.50, while Jollibee Foods Corp., the largest fast food chain, lost 3.6 percent to P270.
Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, power generation and hospitals, fell 2.2 percent to P5.01, while Bank of the Philippine Islands, the third-biggest bank, slipped 1.5 percent to P97.
Most major Asian markets, meanwhile, rose on Tuesday following another positive Wall Street lead, with energy firms surging along with oil prices.
A healthy earnings season has supported global equities in recent weeks, although gains have been limited by continuing concerns about the simmering trade war between China and the US.
As investors awaited the next developments in the tariffs dispute, they moved in to pick up cheaper stocks. Hong Kong was up more than one percent as it built on Monday’s gains. Shanghai surged to close 2.7 percent higher, day after hitting a near two-and-a-half-year low.
Tokyo jumped 0.7 percent and Singapore 1.8 percent, while Seoul gained 0.6 percent. However, Sydney dipped 0.3 percent, while Wellington and Taipei were also lower. Mumbai was flat, having hit a record high Monday.
Energy firms soared after a rise in oil prices Monday on the back of reports that Saudi Arabia had lowered its output. PetroChina piled on more than four percent in Hong Kong and Tokyo-listed Inpex was 1.9 percent higher.
Also, the US reimposed stiff sanctions on Iran following Donald Trump’s decision to exit a multi-nation nuclear deal with the major producer. While the first round of sanctions targets the Islamic republic’s access to US banknotes and key industries including cars and carpets, the country’s key oil sector is in line to be hit on November 5.
Oil was slightly higher on Tuesday in Asia.
But the issue has fueled geopolitical concerns, with some observers saying the White House is working towards regime change in Tehran. With AFP