Fuel price hike may spook stock investors
While the local bourse enjoyed a good winning streak last week, investors’ frenzy may hit a wall this week as higher fuel prices heighten fears of accelerating inflation.
Peter Garnace, equity research analyst at Unicapital Securities Inc., told the Inquirer on Friday the benchmark index’s gains may “remain limited.”
This was due to the fifth straight week of rising fuel prices, “which could stoke renewed inflation concerns,” Garnace said.
In an earlier advisory, Jetti Petroleum president Leo Bellas warned gasoline prices may go up by P1 to P1.20 per liter this week. Meanwhile, diesel prices may climb by 60 to 80 centavos a liter due to geopolitical conflict.
The Philippine Stock Exchange Index (PSEi) closed last week on a four-session winning streak, with a 2.5-percent week-on-week rally to 6,264.
This win was attributed mainly to the US Federal Reserve’s move to cut interest rates for the first time this year, sending a positive signal in markets across the globe.
Optimism spilled over to the Philippines, as the American central bank’s policy decisions are often mirrored by the Bangko Sentral ng Pilipinas.
While there may be “potential attempts” to extend the PSEi’s climb, Garnace also warned that the current political environment would remain in focus.
According to him, investors will be “closely monitoring developments and their potential implications for government policies and the broader economy.”
At the same time, the “weak position” of the local currency could be another potential downside for the market, said Japhet Tantiangco, research head at Philstocks Financial Inc.
The peso closed last Friday at 57.15 against the US dollar, from 57.06 the previous day. Tantiangco sees the PSEi’s major resistance at the 6,400 level.
