By Arra B. Francia, Reporter

LOCAL SHARES dropped on Thursday as investors stayed on the sidelines ahead of the release of inflation data on Friday.

The bellwether Philippine Stock Exchange index (PSEi) fell 0.51% or 40.93 points to close at 7,854.13 yesterday, snapping its two-day ascent. The broader all-shares index likewise slipped 0.15% or 7.72 points to finish at 4,832.62.

“A while ago, the Philippine Statistics Authority revised Q4 GDP (gross domestic product) higher to 6.3% from 6.1%…and tomorrow will be the announcement of inflation rate. I think some investors are waiting for these catalysts to go back to the bullish market,” Fidelity Securities, Inc. Trader Jenesis dela Peña said in a text message on Thursday.

A BusinessWorld poll of 13 economists yielded a 3.5% median for the headline inflation rate for March. If realized, this will be slower than February’s 3.8% pace and the 4.3% rate seen in March 2018. The poll result also falls within the 3.1-3.9% estimate range given by the Bangko Sentral ng Pilipinas last week.

Inflation has so far averaged 4.1% in 2019, slightly above the central bank’s 2-4% target range for the year.

Eagle Equities, Inc. Research Head Christopher John Mangun, meanwhile, attributed the market’s performance to generally cautious investor sentiment.

“The market continues to trade sideways on low volumes. The general investor sentiment remains cautious… I expected the index to be closer to 8,000 as inflation numbers are expected to be released tomorrow, however, it did not turn out that way,” Mr. Mangun said in an e-mail on Thursday.

Four sectoral indices moved to negative territory, led by financials which plunged 1.08% or 19.01 points to close at 1,732.35. Services stumbled 0.82% or 13.21 points to 1,586.47; holding firms slumped 0.57% or 44.36 points to 7,698.36, while property dipped 0.06% or 2.59 points to 4,081.27.

In contrast, industrials climbed 0.28% or 33.61 points to 11,734.78, while mining and oil rose 0.26% or 20.58 points to 7,725.18.

Foreign investors snapped their 10-day net buying streak, recording net outflows of P243.86 million on Thursday against net purchases of P2.12 billion in the previous session.

Turnover stood at P5.91 billion after some 1.29 billion issues switched hands, lower than the previous session’s P6.45 billion. Decliners outpaced advancers, 109 to 87, while 46 names were unchanged.

The main index failed to mirror the positive performance of markets overseas, after the United States and China supposedly made progress on a trade deal. Officials said they are hopefully getting closer to a deal this week.

With this, the Dow Jones Industrial Average advanced 0.15% or 39 points to 26,218.13. The S&P 500 index gained 0.21% or 6.16 points to 2,873.40, while the Nasdaq Composite index went up 0.6% or 46.86 points to 7,895.55.

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