Local share prices dropped further after the government announced a higher-than-expected inflation rate for January.
The main index lost 55.35 points or 0.80 percent to close at 6,881.26 with the Services sector seeing the biggest drop while Conglomerates and Miners managed to advance. Volume weakened to 1.03 billion shares worth P6.14 billion as losers beat gainers 97 to 88 with 51 unchanged.
“Philippine equities fell, pressured by rising inflation and US bond yields as investors braced for the latest commentary due Tuesday from Fed Chairman Jerome Powell,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
He noted that, “January inflation continued to accelerate at 8.7 percent, led by an increase in the food components.”
Philstocks Financial Assistant Research Manager Claire Alviar said “The local bourse dropped as the Philippine inflation rate came in higher than the expectation which could raise the possibility that the Bangko Sentral ng Pilipinas (BSP) will remain aggressive in its monetary tightening, especially on its upcoming meeting.”
She added that, “Last month, the Philippines’ inflation rate stood at 8.7 percent, faster than December’s 8.1 percent and higher than the forecast range of the BSP at 7.5 percent to 8.3 percent.