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Stocks climb as inflation eases slightly in March

PHILIPPINE shares closed higher on Tuesday as market sentiment improved following the release of data showing that headline inflation eased in March.

The 30-member Philippine Stock Exchange index (PSEi) improved by 94.96 points or 1.46% to close at 6,590.11 on Tuesday, while the all shares index gained 55.54 points or 1.4% to 4,003.

“Local equities ticked higher after March 2021’s inflation print hit 4.5%, coming in slightly lower than the midpoint of the Bangko Sentral ng Pilipinas’ (BSP) projection range [of] 4.6% and BusinessWorld consensus of 4.8%,” China Bank Securities Corp. Research Associate Jason T. Escartin said via e-mail.

“In our view, downward valuation pressures from the inflation narrative started easing as pork imports ramped up in March,” Mr. Escartin said. “Market sentiment may improve further as the odds of higher quotas on pork imports increase in the next several weeks.”

Inflation eased in March after climbing for five consecutive months, the Philippine Statistics Authority reported on Tuesday.

Headline inflation was at 4.5% in March, slowing from the 4.7% print in February but faster than the 2.5% seen in March last year.

It fell within the 4.2-5% estimate given by the Bangko Sentral ng Pilipinas (BSP) for the month

Inflation averaged at 4.5% for the first quarter, beyond the BSP’s 2-4% target range as well as its 4.2% forecast for 2021.

Meanwhile, Philstocks Financial, Inc. Research Associate Claire T. Alviar said the PSEi’s close also reflected “positive sentiment from the US market overnight.”

“Other positive catalysts that have affected the trading were the continued expansion of PMI (Purchasing Managers’ Index) which stood at 52.2 in March and the statement of the Malacañang that the extension of ECQ (enhanced community quarantine) is unlikely,” Ms. Alviar added.

All sectoral indices closed in the green on Tuesday. Holding firms gained 132.8 points or two percent to 6,756.52; industrials went up by 169.24 points or 1.94% to 8,891.29; mining and oil increased by 97.14 points or 1.14% to 8,582.10; property improved by 28.86 points or 0.9% to finish at 3,231.41; services gained 7.38 points or 0.51% to 1,433.63; and financials inched up by 3.55 points or 0.25% to close at 1,384.74.

Value turnover went up to P5.85 billion on Tuesday with 2.42 billion shares switching hands, from the P5.36 billion seen on Monday with 1.85 billion issues traded.

Advancers outnumbered decliners, 159 versus 61, while 39 names closed unchanged.

Net foreign selling, however, grew to P551.88 million on Tuesday from the P267.25 million seen on Monday.

“Coupled with the prospects of a steady improvement in COVID-19 case counts, a manageable inflation trend may buoy markets towards the higher end of our current 6,300-6,600 trading range,” China Bank Securities’ Mr. Escartin said.

He said the market will monitor the BSP’s consumer and business expectations surveys and February remittances data for leads. — Keren Concepcion G. Valmonte

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