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PSEi down 2.34% on inflation worries

Share prices on the Philippine Stock Exchange closed in the red on Thursday amid concerns of higher inflation.

The local stock barometer PSEi slipped by 147.76 points or 2.34% to 6,155.43 at the closing bell. The broader All Share also declined by 52.89 points or 1.56% to 3,336.23.

Philstocks Financial stock market analyst Claire Alviar said the market’s decline was “amid a lack of positive catalyst at home, coupled with a higher inflation rate expectation this June.”

Ferdinand Marcos Jr., who won the presidency by a landslide of 31 million votes, took oath as the 17th president of the Philippines earlier in the day.

Sought for comment if Marcos’ inauguration has impacted market sentiment, Regina Capital head of sales Luis Limlingan said it has “no effect whatsoever.”

This was echoed by Eagle Equities Inc. president Joseph Roxas, saying, “I think it has no real impact.”

Roxas said investor sentiment was influenced by “prospects of higher inflation” and the openness of new Bangko Sentral ng Pilipinas Governor Felipe Medalla to more aggressive rate hikes.

The BSP is projecting inflation is likely to settle within the 5.7% to 6.5% range in June, with the lower end already higher than the three-year high of 5.4% recorded in the previous month.

A reading of 5.7% would be the highest since the 5.2% in December 2018, while a reading of 6.5% would be the highest since the 6.9% in October 2018.

“This weighed heavily on the sentiment as consumers' purchasing power is anticipated to weaken. Moreover, the second-round effects are also expected which may further push the inflation upward in the coming months,” Alviar said.

“Moreover, the possibility that the BSP may increase the interest rate higher than the planned 25 basis points, somehow, weighed on sentiment as it may slow down the economic growth,” she added.

More than 881.35 million shares valued at P6.41 billion, changed hands. Decliners led advancers, 117 to 71, and 47 issues were unchanged. — RSJ, GMA News