Inflation jitters sink mart into deep red
Heavy selling pulled the market down by 228.55 points, one of the biggest single-day drop of barometer stocks on turnover of P5.57 billion.
The Philippine Stock Exchange index closed at 6,530.04.
Investors are looking to see if inflation has peaked or if the United States (US) Federal Reserves will need to be even more aggressive to tamp down price increases, Regina Capital Development Corp. managing director Luis Limlingan said.
The consensus expects 8.3 percent for the main index and 5.9 percent for the core index from last year, which excludes food and energy prices.
It was reported that initial jobless claims increased more than expected in the week ended 4 June and the four-week moving average rose 8,000 to 215,000 jobs.
Meanwhile, preliminary data from the Philippine Statistics Authority showed a 54.07 percent jump in the country’s trade deficit to $4.773 billion from last year.
During the month, imports accelerated by 22.79 percent to $10.901 billion from a year ago, driven mainly by inbound shipments of expensive fuel.
In contrast, exports logged its 14th consecutive month of growth as it went up by 6.02 percent to $6.128 billion, led by sales of electronic products.
Lockdowns back
Elsewhere in Asia, stocks fell as the Chinese cities of Shanghai and Beijing went back on Covid-19 alert, while Indonesian stocks took a hit after the world’s biggest palm oil exporter raised its maximum palm oil export tax.
Sentiment in the region soured after news of renewed restrictions in China as new Covid-19 cases emerged. Multiple districts in Beijing are shutting down entertainment venues, while most citizens in Shanghai are facing new rounds of mass testing to prevent a new outbreak.
Investors were also cautious ahead of US inflation data later in the day, which could guide the Federal Reserve’s policy tightening path.