PSEi plunges to three-year low on growth woes

Philippine stocks retreated on Wednesday, with the benchmark index plunging to a three-year low, amid fears over slowing economic growth that were worsened by negative sentiment from Wall Street due to concerns over the valuation of the artificial intelligence (AI) sector.

The bellwether Philippine Stock Exchange index (PSEi) fell by 0.83% or 48.98 points to close at 5,818.06, while the broader all shares index decreased by 0.68% or 24.50 points to end at 3,534.38.

This was the PSEi’s worst finish in over three years or since it closed at 5,783.15 on Oct. 3, 2022.

The main index opened Wednesday’s session at 5,891.23, higher than Tuesday’s close, but sank to an intraday low of 5,763.68. It managed to recoup some of its losses before the closing bell.

“The Philippine market closed lower amid heavy selling pressure despite inflation figures aligning with expectations. However, the upcoming release of GDP (gross domestic product) data and corporate earnings from major index constituents will likely influence market sentiment and determine the market’s next direction,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market dropped as investors traded cautiously while looking forward to the third-quarter GDP data release, which is expected to be below target,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

The Philippine economy likely grew by 5.3% in the third quarter, according to the median forecast of 18 economists and analysts in a BusinessWorld poll. This would be slower than the 5.5% expansion in the second quarter and is below the government’s full-year GDP growth target of 5.5%-6.5%.

The Philippine Statistics Authority will release third-quarter GDP data on Friday (Nov. 7).

“Negative spillovers from Wall Street amid overvaluation concerns with the US’ artificial intelligence sector also affected the local bourse today,” Mr. Tantiangco added.

All sectoral indices closed in the red. Mining and oil sank by 3.62% or 446.88 points to 11,891; holding firms dropped by 1.3% or 61.88 points to 4,689.75; property fell by 0.99% or 21.62 points to 2,142.74; industrials went down by 0.69% or 60.24 points to 8,588.41; services decreased by 0.57% or 12.99 points to 2,255.07; and financials retreated by 0.52% or 10.20 points to 1,925.98.

“Metropolitan Bank & Trust Co. was the day’s index leader, climbing 2.26% to PHP 68. Aboitiz Equity Ventures, Inc. was the main index laggard, falling 4.78% to PHP 26.90,” Mr. Tantiangco said.

Decliners overwhelmed advancers, 137 to 53, while 61 names were unchanged.

Value turnover went down to PHP 4.72 billion on Wednesday with 406.27 million shares traded from the PHP 6.37 billion with 538.81 million issues exchanged on Tuesday.

Net foreign buying edged down to PHP 339.58 million from PHP 339.79 million. — A.G.C. Magno