Stocks plunge on higher inflation

The local stock barometer sank by more than 100 points Thursday after the Philippine Statistics Authority reported that inflation rate picked up to a four-month high in September.

The 30-company Philippine Stock Exchange Index fell by 119.60 points, or 1.9 percent, to close at 6,178.60, while the broader all-shares index declined by 49.81 points, or 1.47 percent, to settle at 3,348.75.

“The unexpectedly high September inflation print poured cold water on investor sentiment and sank the index to its slowest in over a week,” China Banking Corp. managing director Juan Paolo Colet said.

Inflation climbed to 6.1 percent in September from 5.3 percent in August on faster increases in the prices of food and non-alcoholic beverages. The figure is also higher than the median analyst estimate of 5.4 percent and the high end of Bangko Sentral ng Pilipinas’ guidance of 5.3 percent to 6.1 percent.

“This negative surprise brought selling pressure throughout the trading session and was in stark contrast to the positive performance of most Asian stock markets,” Colet said.