SHARE prices plunged on Wednesday, with the main index losing more than 100 points after the country’s inflation rate again went beyond consensus estimates.
The benchmark Philippine Stock Exchange index (PSEi) fell 129.55 points to close at 7,752.27 points.
Volume of shares traded was still anemic at 1.69 billion shares worth just P5.88 billion as investors stayed on the sidelines.
The country’s inflation rate surged to 6.4 percent in August, which again surprised investors.
Consensus estimates for the inflation, the measure of the rate of the rise of prices of a basket of goods, was below 6 percent. The Department of Finance is expecting a 5.9-percent rate and the Central Bank between 5.5 percent and 6.2 percent.
“Investors were predicting lower as the Bangko Sentral ng Pilipinas [BSP] set the high end of the range at 6.2 percent. This will probably also add pressure to another rate hike which could be as much as 50 basis points,” said Luis Limlingan, managing director at Regina Capital and Development Corp.
The policy-making Monetary Board will meet later this month after the US Federal Reserve policy meeting.
“We view that a 50-basis points hike may be needed. Not only we are trying to tame the cost of goods, but the US may raise their key interest rates when the Federal Reserve meets on September 25 and 26,” Limlingan said.
Foreign investors were net sellers at P1.04 billion.
“We should watch out if the negative sentiment will continue on Thursday, especially since technicals are lining up with the index correcting after failing to push through its resistance level near 7,900. Initial support for the PSEi should it continue its downward move for the rest of the week is at 7,500,” said Gio Perez, trader at Papa Securities Corp.
All other sub-indices ended on the red, led by the broader All Shares index that gave up 63.84 points to close at 4,732.02; the Financials index fell 50.76 to 1,753.84; the Industrial index declined 99.33 to 11,226.33; the Holding Firms index dropped 110.35 to 7,709.23; and the Property index plunged 73.04 to 3,856.96.
Ayala Land Inc. was the day’s most traded and it fell P0.80 to P43.40. BDO Unibank Inc. declined P6.60 to P123.30; SM Prime Holdings Inc. shed P0.95 to P37.75; Ayala Corp. lost P12 to P973; and Metropolitan Bank and Trust Co. was down P1.45 to P72.20.