Stocks slump as oil prices stoke inflation concerns
LOCAL EQUITIES tumbled on Tuesday as the rise of global oil prices heightened inflation fears alongside the continued sell-off by foreign investors. The 30-company Philippine Stock Exchange index dropped 1.24% or 89.72 points to close at 7,132.36 yesterday, falling for the third consecutive session. The main index plunged to as low as 7,093.92 for the day before paring losses in time for closing bell.
LOCAL EQUITIES tumbled on Tuesday as the rise of global oil prices heightened inflation fears alongside the continued sell-off by foreign investors.
The 30-company Philippine Stock Exchange index dropped 1.24% or 89.72 points to close at 7,132.36 yesterday, falling for the third consecutive session. The main index plunged to as low as 7,093.92 for the day before paring losses in time for closing bell.
The broader all-shares index also gave up 0.97% or 43.29 points to finish at 4,398.80.
“Crude oil price continues to be on the bullish uptrend now at more than $75 per barrel while net foreign selling persists weakening the peso. Both are inflationary in nature thus will further push prices upward,” Diversified Securities, Inc. trader Aniceto K. Pangan said via text on Tuesday.
Oil prices jumped to their highest in nearly four years overnight, as markets project tighter supply once the United States’ sanctions against Iran take effect next month.
“This has made the investors jittery resulting in the market selling,” Mr. Pangan added.
Meanwhile, Papa Securities Corp. trader Gabriel Jose F. Perez noted that index heavyweight SM Prime Holdings, Inc. contributed to the market’s loss, as it was sold down by 5%. The Sy-led firm recorded the highest foreign outflow for the day at P292.7 million.
Foreign investors ended at a net selling position for the 24th straight day with net outflows worth P397.38 million, lower than Monday’s P677.5 million.
In contrast, markets in the United States climbed after Washington and the Canadian government inked a deal to replace the North American Free Trade Agreement. US President Donald J. Trump called the deal “truly historic.”
With this, the Dow Jones Industrial Average rose 0.73% or 192.90 points to 26,651.21, while the S&P 500 index added 0.36% or 10.61 points to 2,924.59. The Nasdaq Composite index however dipped 0.11% or 9.05 points to 8,037.30.
Asian indices mostly fell on Tuesday following cautious view on the global economy.
Back home, sectoral indices suffered another bloodbath, led by the property sector with a decline of 3.65% or 132.28 points to 3,484.28. Mining and oil shed 2.49% or 221.20 points to 8,632.92; financials slipped 0.71% or 11.57 points to 1,609.11; holding firms went down 0.63% or 45.14 points to 7,015.43; industrials gave up 0.41% or 43.50 points to 10,431.80; while services dipped 0.11% or 1.74 points to 1,500.48.
Decliners outpaced advancers, 112 to 72, while 56 issues ended flat.
Some 921.4 million issues valued at P5.70 billion switched hands, rising from the previous session’s P4.23-billion turnover.
“We might however continue to see more of the lackluster volume in the next few days as the market awaits Friday’s inflation data release,” Papa Securities’ Mr. Perez said in an e-mail.