Stocks continue to fall despite strong GDP

Published May 12, 2022, 5:50 PM

by James A. Loyola

The local stock market continued to fall as the better-than-expected economic growth numbers failed to boost investor sentiment.

The PSEi slid by 103.56 points or 1.56 percent to close at 6,532.30 points with Property and Banks leading the retreat across the board. Volume improved 1.59 billion shares worth P7.42 billion as losers beat gainers 128 to 70 with 48 unchanged.

Philippine Stock Exchange index (PSEi)

“Philippine shares plunged despite the better-than-expected GDP, as sentiment was dragged by hotter-than-expected US inflation data,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

He noted that, local inflation has been “much more manageable and the BSP has had more room to operate the timing of raising its rates, unlike the Fed.”

Philstocks Financial Senior Supervisor for Research Japhet Tantiangco said “The local market dropped further on the back of the negative spillovers from Wall Street. This came as the US’ April inflation rate stood at 8.3 percent, staying near its 40-year high of 8.5 percent recorded in the preceding month.“

He explained that, “The US inflation staying near its highs triggered concerns that the Federal Reserve may pursue more aggressive monetary tightening policies in their upcoming meetings.”

Tantiangco added that, “Foreign transactions posted a net outflow of P1.28 billion adding fuel to the decline.”