The Daily Tribune <<< Without Fear or Favor >>>

»HEADLINES

»NATION

Peso, stocks plunge as inflation fears rise

06/12/2008

The peso and the stock index slumped to new lows yesterday as investors’ fears over rocketing inflation will affect economic growth grew.

The composite index fell sharply for the second straight session, closing at a fresh 20-month low while the peso fell as much as a fifth of a percent to 44.50 per dollar, its weakest level since last October.

The peso managed to recover near the close of trade with suspected Bangko Sentral ng Pilipinas intervention to support the currency. It finished at 44.43 per dollar from the previous day’s 44.425.

Share prices gave up 2.5 percent of their value on continued concerns about inflation and weakness in the US economy, dealers said.

The composite index fell 66.67 points to 2,579.28 points. The all-share index fell 1.67 percent to 1,639.08 points.

Only 23 stocks advanced compared to 87 decliners and 44 unchanged. Turnover fell to P2.797 billion compared to P4.25 billion in the previous trading day.

“Inflation is still a major concern even though oil prices have fallen slightly,” said Rommel Macapagal of Westlink Global Equities Inc.

“The past few weeks, we have been looking for directions and the direction we got was the big drop on Friday in the US market,” he said.

“The next support level is 2,550. Hopefully some bargain hunting could come in and lift us above the 2,600 level,” he said.

Telecom giant Philippine Long Distance Telephone Co. fell 4.1 percent to P2,335. Top conglomerate Ayala Corp. dropped 4.9 percent to P290. Bank of the Philippine Islands fell 1.01 percent to P49.

San Miguel Corp. saw its A shares, available only to Filipinos, fall 2.4 percent to P40.50 while its B shares, which are available to foreigners, were unchanged at P41.

Over the last two days, the market has lost 5.9 percent.

“Investors are still wary over macroeconomic issues. Technically, however, a recovery should be forthcoming,” Asiasec Equities analyst Oliver Plana said.