PSEi dips as jobless rate rises, peso falls

MANILA, Philippines — Local stocks moved counter to other Asian bourses yesterday as investors took profits after four consecutive days of gains.

“The 30-company Philippine Stock Exchange index or PSEi slumped by 92.69 points or 1.44 percent to close at 6,352.32 the Philippine Statistics Authority (PSA) disclosed unemployment rate rising to six percent in May versus 5.7 percent in April,” AB Capital Securities said in a commentary.

The broader All Shares index and other sectoral indexes also ended with losses.

Analysts said the market’s fall shows it is still cautious amid rising inflation, widespread fears of a global recession, and the continued fall of the peso which hit 56 to the dollar yesterday.

“The peso’s depreciation to the 56 per US dollar level, and concerns over a possible aggressive monetary tightening of the Bangko Sentral ng Pilipinas to temper inflation and support the local currency fueled the negative sentiment,” said Philstocks Financial.

Total value turnover was P4.69 billion, with foreign funds ending with P662.86 million net selling.

Meanwhile, most Asian shares edged up yesterday as investors juggled concerns over inflation and a recession after minutes from the US Federal Reserve’s June meeting showed officials rallied around an outsized interest rate hike.

Wall Street closed higher overnight, while oil continued to slide as investors digested new clues on the Fed’s approach to rate policy and its inflation fight detailed in the minutes of the meeting.

The US central bank officials noted a willingness to move interest rates as high as needed to bring inflation down to the Fed’s two percent target, and a need to convince the public that it was prepared to do so.

“To a fair extent, risks of further demand destruction from more restrictive monetary policy flagged in Fed minutes were already mentioned by (Fed chairman Jerome) Powell as well as other Fed officials and the spook factor from a restrictive policy has likely diminished,” Maybank GM Research analysts said in a note.