PSEi falls as yields, oil rise
Philippine stocks sank below the 5,900 level on Friday as rising treasury yields, elevated oil prices and a weak peso dampened investor appetite.
The benchmark Philippine Stock Exchange Index (PSEi) fell 1.72 percent, or 102.73 points, to close at 5,855.91.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said this marked the PSEi’s lowest level in more than three and a half months, or since July 1.
Philstocks Financial Inc. research manager Japhet Tantiangco said local treasury yields climbed as investors weighed the outlook for interest rates and inflation.
Short-term yields rose after the US Federal Reserve’s latest policy rate increase fueled expectations the Bangko Sentral ng Pilipinas could follow suit.
Long-term yields, meanwhile, increased amid rising inflation expectations.
“The rise in treasury yields makes stocks less attractive,” Tantiangco said.
Higher yields can weigh on equities as they increase the appeal of fixed-income instruments relative to stocks.
Tantiangco added that elevated global oil prices and the weakness of the peso further pressured the market.
Despite the selloff, trading activity was strong. Net value turnover reached P15.1 billion.
Most sectoral indices ended in negative territory. Mining and oil was the sole gainer, rising 1.65 percent.
Services suffered the steepest decline, shedding 2.53 percent.
Among index members, ACEN Corp. bucked the broader downturn, surging 9.13 percent to P2.87.
Semirara Mining and Power Corp. was the session’s worst index performer, plunging 10.42 percent to P17.96.
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