Share prices fell Tuesday on profit-taking amid rising inflation and soaring crude prices in the world market caused by the Russian invasion of Ukraine.
The Philippine Stock Exchange Index dipped 47.64 points, or 0.7 percent, to 6,774.68 on a value turnover of P35.7 billion. Losers beat gainers, 113 to 76, with 48 issues unchanged. Trading was heavy as investors reacted to the rebalancing of the MSCI Global Standard Index on Philippine stocks that took effect May 31.
Noodles maker Monde Nissin Corp. sank 6.3 percent to P14.80, while SM Prime Holdings Inc. of the Sy Group, dropped 2.9 percent to P36.90.
PLDT Inc. of Indonesia’s Salim Group, the biggest telecommunications firm, declined 3.1 percent to P1,900, while rival Globe Telecom Inc. of the Ayala Group, the second-biggest, slumped 6.2 percent to P2,428.
The rest of Asian stock markets were mixed Tuesday as investors battled to maintain a global rally, with inflation still niggling over a pick-up in oil prices while a top Fed official pressed for a series of sharp rate hikes.
But optimism was boosted by data indicating an improvement in China’s crucial manufacturing sector, helped by the easing of some strict COVID containment measures in major cities including Shanghai.
With Wall Street closed for a holiday, there were few catalysts to help extend the gains enjoyed in recent days, allowing inflation and borrowing costs to take center stage.
Crude prices built on Monday’s advance after the European Union reached a deal on a partial embargo of Russian imports as part of a punishment for its invasion of Ukraine.
Brent broke above $122 for the first time in two months and WTI sat around $117 as European chiefs said the latest sanctions would ban purchases of Russian oil delivered by sea, though there would be a temporary exemption for pipelines.
While widely expected, the agreement adds further upside to crude just as China begins to ease COVID restrictions in Shanghai and Beijing, raising the likelihood of a jump in demand from the world’s number two economy.
Hong Kong and Shanghai rose more than one percent, while Seoul, Singapore, Taipei, Jakarta, Bangkok and Wellington also advanced.
Tokyo, Sydney and Mumbai fell.
The lift in oil prices will help fan already elevated inflation and pile further pressure on central banks to tighten monetary policy to prevent prices from running out of control.
In a sign of the struggle policymakers face, German prices are rising at their fastest pace ever while Spain’s topped forecasts.
In the United States, the chances of an extended period of rate hikes were increased after Federal Reserve Governor Christopher Waller said he favored half-point hikes “for several meetings” until inflation slows towards the bank’s two percent target.
Waller added that his goal was in line with market expectations, which is about 2.75 percent in December.
President Joe Biden is due to hold talks with Fed boss Jerome Powell on Tuesday to discuss the inflation situation.
Jobs data on Friday will provide an update on the state of the US economy in light of soaring prices and rising rates. With AFP