Economy 2 MIN READ

PSEi up on better-than-expected Q1 GDP growth

May 12, 2023By BusinessWorld

PHILIPPINE SHARES extended their climb on Thursday after better-than-expected gross domestic product (GDP) growth for the first quarter (Q1) and slower consumer inflation in the United States.

The benchmark Philippine Stock Exchange index (PSEi) gained 16.87 points or 0.25% to close at 6,675.46 on Thursday, while the broader all shares index went up by 5.38 points or 0.15% to 3,551.48.

“Stocks inched higher today after the Philippines reported better-than-expected first-quarter GDP growth. Adding to that was the announcement of another drop in US CPI (consumer price index) at 4.9%,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message on Thursday.

“Overseas, US inflation rate in April eased to 4.9% from 5% in March. This boosted sentiment as the US Federal Reserve may pause hiking rates already, especially if the trend continues,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

First-quarter GDP growth slowed to 6.4% from the 7.1% in the fourth quarter of 2022, preliminary data from the Philippine Statistics Authority showed.

This was also below the 8% in the first quarter of 2022.

Still, this was faster than the 6.1% median estimate of a Businessworld poll of 23 analysts conducted last week.

The government targets 6-7% GDP growth for the year.

Meanwhile, US consumer prices increased in April on higher gasoline costs and rents, while underlying inflation remained strong as used motor vehicle prices rebounded, potentially ensuring that the Federal Reserve keeps interest rates elevated for a while, Reuters reported.

The US CPI rose 0.4% last month after gaining 0.1% in March, the Labor department said on Wednesday.

In the 12 months through April, consumer inflation increased 4.9% after advancing 5% on a year-on-year basis in March.

The Fed has raised interest rates by 500 basis points since March 2022.

At home, the majority of sectoral indices closed higher on Thursday, except for mining and oil, which fell by 179.07 points or 1.7% to 10,350.77, and industrials, which declined by 26.77 points or 0.27% to 9,556.52.

Meanwhile, property climbed by 25.61 points or 0.93% to 2,771.82; services added 6.75 points or 0.42% to end at 1,584.06; financials went up by 5.88 points or 0.31% to 1,874.07; and holding firms rose by 7.83 points or 0.11% to 6,621.25.

Value turnover increased to PHP 6.24 billion on Thursday with 23.28 billion shares changing hands from the PHP 4.64 billion with 721.31 million issues traded on Wednesday.

Decliners outnumbered advancers, 98 versus 66, while 62 names closed unchanged.

Net foreign selling stood at PHP 939.28 million on Thursday versus the PHP 64.86 million in net buying recorded on Wednesday. — By A.H. Halili with Reuters

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