PSEi sinks to near seven-month low

MANILA, Philippines — The main stock index yesterday sank to a near seven-month low as investors grow wary that inflation spikes in the region may drive interest rates up, traders said.

The 30-company benchmark Philippine Stock Exchange index (PSEi) shed 34.36 points or 0.55 percent to close at 6,164.89 while the broader All Shares index shaved off 21.46 points or 0.55 percent to end at 3,281.27.

Regina Capital head of sales Luis Limlingan said investors may pacify their trading activities this week to wait for how the US Federal Reserve will respond to the inflation spike of 4.2 percent – the fastest pace since 2008 – in April.

“Philippine shares kicked off Monday on a weak note on concerns about the Fed policy in the face of rising inflation pressures,” Limlingan said in a market analysis.

A total of P4.48 billion worth of shares changed hands yesterday, with losers outnumbering gainers, 127 to 79, while 40 issues were unchanged.

Limlingan expects the market to trade sideways on uncertainties brought about by the delay in the country’s vaccination program and the economy’s reopening.

“The market expects the rotation trades to continue to play out with the vaccine rollout and the reopening of the economy,” he said.

Last week, the PSEi dipped below the 6,200 support level on concerns an interest rate hike in the US could limit its economic growth and spill over to business activities here.

In a report, COL Financial said the PSEi remains trapped in its downward momentum and may remain so this week given the pressure from MSCI flows and liquidity being soaked up by the largest local IPO in history by Monde Nissin (P55.89 billion).