Philippine share prices closed 0.8 percent lower on Wednesday due to renewed fears of inflation, fuelled by record-high prices of oil, dealers said. But the downturn was muted, with thin volumes suggesting that investors were not yet in panic mode and many were just sitting on the sidelines.
The composite index fell 23.70 points to 2,872.45 points off the day's low of 2,859.38. The all-share index was down 12.17 points or 0.7 percent at 1,770.37. There were 64 decliners and 27 advancers, while 64 were unchanged. Turnover shrank to 1.7 billion pesos (39.44 million dollars) from Tuesday's 2.7 billion pesos. The peso traded at 43.1 to the dollar.
"The market is just taking a breather after its recent rally from oversold levels. The problem about inflation is turning uglier but there hasn't been panic selling," said Gomer Tan of Regina Capital Development Corp.
"Skyrocketing oil prices renewed inflationary concerns. The fundamentals point to even higher oil prices, and making matters worse is the speculative element as funds are now flowing into commodities," said Jose Vistan of AB Capital Securities.
A weakening Philippine peso was also a drag on investor sentiment, said Francisco Liboro of PCCI Securities, as importers led by oil companies scramble for dollars to pay for still rising crude prices. Philippine Long Distance Telephone Co, the country's biggest company by market value, fell 0.9 percent to 2,655 pesos, tracking overnight losses in its American Depository Receipts. But Philex Mining, the country's biggest producer of gold and copper, bucked the trend as commodities rallied. Philex rose 2.8 percent to 7.40 pesos.
Food and drinks giant San Miguel Corp's A-shares, which only Filipinos can trade, lost 1.1 percent to 43.50 pesos. Its B-shares, open to foreigners, slipped 2.2 percent to 45 pesos.
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