Inflation woes spur massive sell-off in Philippine stocks

The Philippine stock market suffered another gloomy session on Thursday, as foreign investors continue to sell their shares over inflation worries.

The bellwether Philippine Stock Exchange index fell sharply by 2.73 percent or 105.06 points to close to its September 2010 levels of 3,738.31.The broader all-share index also retreated by 2. 11 percent, along with all six subindices, led by the property sector.

Trading volume reached 1.71 billion shares valued at 6.34 billion pesos (144.60 million U.S. dollars) with 126 issues tumbling and only 19 stocks advancing. A total of 30 stocks meanwhile closed flat.

"Fear of higher-than-expected inflation rate this year continue to haunt investors in the local market," brokerage DBP-Daiwa Securities, Inc. said.

Wednesday's massive sell-off came ahead of the local central bank's Monetary Board meeting where central banks officials will determine any changes in their key benchmark rates and inflation forecasts.

DBP-Daiwa Securities said it is possible that investors are now discounting an inflation rate forecast upward adjustment by the central bank, although they expect no changes in the policy rates as officials maintain their stance of a relatively benign inflation pressure.

Inflation in January hit a four-month high of 3.5 percent.

Foreign investments continue to flow out of the local equities for the ninth straight day on Thursday. Net foreign selling amounted to 718 million pesos (16.52 million U.S. dollars).

Stocks in the 30-company index fell. Ayala Land, Inc. tumbled by 5.09 percent.

Source:Xinhua