Market shrugs off higher inflation data

MANILA, Philippines - Last-minute bargain hunting allowed the bellwether index to slightly recover yesterday despite the release of higher inflation figure for May.

The Philippine Stock Exchange index inched up 0.09 percent or 5.87 points to end at 6,772.44, while the broader all shares index rose 0.38 percent or 15.35 points to 4,077.18.

“It was a last-minute rally, more on bargain hunting,” Freya Natividad, investment analyst at Papa Securities, said in a phone interview.

“I think the intraday decline was investors’ immediate reaction to the higher-than-expected inflation,” she said.

The benchmark index recorded an intraday low of 6,743.82 following news that increased prices of food and non-alcoholic beverages sent inflation to a 29-month high in May, hitting 4.5 percent from 4.1 percent the previous month and 2.6 percent a year ago. Investors expect that monetary authorities will jack up interest rates to counter high inflation.

However, some investors took advantage of lower prices to pick stocks anew, Natividad said.

Wall Street improved anew overnight, driven by the technology sector. The Dow Jones industrial average added 0.09 percent or 15.19 points to close at 16,737.47, while the broader Standard & Poor’s 500 index rose 0.19 percent or 3.62 points to 1,927.86, a record high.

Local counters were mixed. Advancers were led by the property sector that gained 0.48 percent or 12.55 points to 2,635.19 while decliners were paced by financial firms that dropped 0.17 percent or 2.81 point to 1,599.72.