The benchmark index retreated to the 6,400 level for the first time in over a month on Wednesday on expectations that economic growth would miss the government’s target for this and next year.
The Philippine Stock Exchange index (PSEi) fell by 1.38% or 89.93 points to finish at 6,411.41 on Wednesday, while the broader all shares index dropped by 0.94% or 33 points to end at 3,451.74.
This was the PSEi’s worst finish since it closed at 6,404.97 on April 16. This was also below the market’s end-2023 close of 6,450.04.
“The local bourse dropped as the sentiment was dampened by the latest Monetary Policy Report, which stated that the Bangko Sentral ng Pilipinas (BSP) sees the Philippines’ economic growth to miss the government’s target in 2024 and 2025 due to the impact of high interest rates,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“Overseas, most Asian markets also traded lower as investors assessed inflation rates in the region,” she added.
The BSP’s report said the Philippine economy could operate “slightly below potential,” with gross domestic product (GDP) expansion seen settling below the government’s growth targets of 6-7% for 2024 and 6.5-7.5% for 2025.
Philippine GDP grew by 5.7% in the first quarter, faster than 5.5% in the previous quarter but slower than 6.4% a year ago, latest data showed.
“Philippine shares succumbed to more profit taking as the index sank to 6,400 as concerns over inflation, weak demand at a Treasury auction, and cautious statements from policy makers dampened sentiment,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Geopolitical tensions, like US-China issues impacting Boeing, and fluctuations in vaccine stocks due to bird flu concerns, added to volatility,” Mr. Limlingan added.
All sectoral indices ended lower on Wednesday. Financials lost 2.35% or 47.14 points to close at 1,952.41; services declined by 1.67% or 32.78 points to 1,928.35; property went down by 1.23% or 30.17 points to 2,404.75; mining and oil dropped by 0.67% or 62.39 points to 9,226.56; industrials retreated by 0.5% or 45.69 points to 9,076.12; and holding firms decreased by 0.45% or 26.4 points to 5,761.80.
“Among the index members, BDO Unibank, Inc. and Metropolitan Bank & Trust Co. weighed down not just their sector but the entire PSEi, losing 3.7% and 3.32%, respectively. Meanwhile, four stocks were able to post gains, with Manila Electric Co. gaining the most, up by 0.87%,” Ms. Alviar said.
Value turnover went up to PHP 5.41 billion on Wednesday with 685.45 million shares changing hands from the PHP 5.27 billion with 583.14 million issues traded on Tuesday.
Decliners overwhelmed advancers, 127 versus 70, while 40 names closed unchanged.
Net foreign selling went down to PHP 763 million on Wednesday from PHP 784.38 million on Tuesday. — RMDO
This article originally appeared on bworldonline.com