Philippine stocks decline as inflation worries weigh on trading

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Philippine stocks decline on inflation

Highlights

Philippine Stock Exchange index drops 0.99% to 5,624.17 as investors brace for a higher October inflation estimate of 7.6%, surpassing September’s 7.2%.
Brent crude futures climb 1.6% to $106.44 a barrel following geopolitical tensions, fueling concerns over inflation and extending pressure on local equities.
Net foreign selling surges to P258.78 million from P4.49 million, while trading value plummets to P5.27 billion from P17.14 billion, reflecting risk-off sentiment.

Inflation expectations and oil prices pressure market sentiment

As reported by BusinessWorld Online, cautious positioning dominates the local market as investors await the Philippine Statistics Authority’s release of October inflation data on Thursday, Nov. 5. The Philippine Stock Exchange index drops 0.99%, or 56.18 points, to 5,624.17, while the broader all shares index declines 0.58%, or 18.58 points, to 3,159.84.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco says expectations of a faster inflation print than September’s 7.2% push investors to sell positions. He adds that higher global oil prices, following the U.S.’ alleged strike on Iran’s Qeshm Island, also weigh on trading sentiment.

A BusinessWorld poll of 22 analysts and economists shows a median estimate of 7.6% for October inflation. If realized, that would mark the fastest pace in nearly four years, exceed this year’s previous 7.2% peaks in April and September, and extend the run of headline inflation above the central bank’s 3% target and 4% ceiling to eight straight months.

The median forecast still sits within the central bank’s 7.1% to 8.1% projection for the month. Brent crude futures rise 1.6% to $106.44 a barrel, while oil markets remain volatile amid conflicting signals from the U.S. and Iran over ending the Middle East war.

Sector losses and foreign selling deepen the slide

COL Financial Group, Inc. Research Analyst Denise Joaquin says the PSEi initially rises on easing oil prices and optimism over U.S.-Iran talks, but later reverses course as weakness in regional markets and renewed concerns over artificial intelligence and technology stocks drag sentiment lower. The index opens at 5,708.03, above Friday’s 5,680.35 close, which also stands as the session’s intraday high, before falling to its intraday low and closing level of 5,624.17.

Five of the six sectoral indices end lower. Services drops 2.71% to 2,880.40, mining and oil falls 1.51% to 17,915.97, industrials loses 0.87% to 7,254.31, property slips 0.3% to 1,790.39, and financials edges down 0.02% to 1,786.60, while holding firms gains 0.22% to 4,246.73.

Within the benchmark index, San Miguel Corp. leads gainers with a 1.62% increase, while International Container Terminal Services, Inc. posts the steepest decline at 3.28%. Decliners outnumber advancers, 106 to 79, with 72 issues unchanged.

Trading activity softens, with value turnover falling to P5.27 billion from P17.14 billion in the previous session, although volume rises to 699.17 million shares from 685.57 million. Net foreign selling increases sharply to P258.78 million from P4.49 million, pointing to sustained caution among overseas investors as inflation and energy price risks remain in focus.

Our earlier article on the sell-off in AI-linked U.S. technology stocks highlighted how falling chip and infrastructure names coincided with oil climbing to around $110 a barrel, amplifying inflation worries. We also noted that higher energy prices can complicate the Fed’s policy outlook and tighten financing conditions, prompting investors to reassess risk exposure amid elevated market volatility.

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