Business

Inflation jitters snap market's 2-day upswing

Inflation jitters snap market's 2-day upswing

MANILA, Philippines — Local stocks reversed course yesterday, wiping out gains made in the past two sessions, as worries about inflation continue to dog the stock market.

The benchmark Philippine Stock Exchange index (PSEi) gave up 38.84 points or 0.61 percent to close at 6,244.74, while the broader All Shares index lost 14.02 points or 0.36 points to end at 3,847.39.

A total of P6.19 billion worth of shares changed hands yesterday, with decliners outnumbering advancers, 139 to 70, while 50 issues were unchanged.

Luis Limlingan, head of sales at Regina Capital, said investors shied away from equities due to risks that inflation may peak in the middle of the year. Also, losses suffered by technology giants across the world pushed them to take a wait-and-see mode, he said.

“Philippine shares continued to drift as inflation concerns and dwindled tech stocks continued to weigh on global equity markets,” Limlingan said.

Moody’s Analytics has warned inflation in the Philippines and in some parts of Asia may peak in the middle of 2021, but said they would be tempered for the rest of the year as economies struggle to swing to growth.

Inflation in the Philippines averaged 4.5 percent from January to April, beyond the two to four percent target band set by the government.

Around Asia, most shares advanced as investors snapped up bargains after recent sell-offs spurred by a worsening of the pandemic in some countries.

Although Asia so far has fared better in curbing COVID-19 infections compared to the US, South and Central America, and parts of Europe, worries are growing about the latest surges in cases in India, Japan, Thailand and other countries.