LOCAL STOCKS declined on Friday due to negative sentiment following slower Philippine economic growth last quarter and concerns over China’s property sector.
The benchmark Philippine Stock Exchange index (PSEi) fell by 74.70 points or 1.17% to close at 6,290.27 on Friday, while the broader all shares index went down by 26.39 points or 0.77% to end at 3,383.41.
Week on week, the PSEi went down by 115.64 points or 1.81% from its close of 6,405.91 on Aug. 11.
“The local market closed last week at 6,290.27, its lowest close since Nov. 11, 2022’s 6,286.77. The bourse has hit a nine-month low as confidence towards the economy gets strained following the slowdown in our economic growth as seen in the Q2 figures,” Philstocks Research Associate Japhet Louis O. Tantiangco said in a Viber message.
“Adding to this are the clouds hanging over our economic outlook including the mounting food inflationary risks to our country mainly due to El Niño, rallying oil prices, and the Federal Reserve which continues to be in a hawkish stance,” Mr. Tantiangco added.
Philippine gross domestic product (GDP) grew by 4.3% in the second quarter, slower than the 6.4% seen in the first quarter and the 7.5% in the same period a year ago.
For the first half, GDP growth averaged at 5.3%, below the government’s 6-7% target for the year.
Meanwhile, the US central bank last month raised borrowing costs by 25 basis points (bps), bringing its target interest rate to a range between 5.25% and 5.5%. It has now hiked rates by a total of 525 bps since March 2022.
The market slumped last week due to contagion concerns amid issues in the Chinese property market, Rastine Mackie D. Mercado, research director at China Bank Securities Corp., said in an e-mail.
Chinese property developer Country Garden last week sought to delay payments for its private onshore bond, further showing signs of a possible cash crunch in the country’s property sector, Reuters reported.
Back home, sectoral indices sank on Friday, except for mining and oil, which went up by 24.04 points or 0.24% to 9,898.69.
Meanwhile, financials dropped by 34.55 points or 1.82% to 1,862.04; industrials went down by 118.09 points or 1.32% or 8,795.80; services declined by 16.23 points or 1.03% to 1,547.80; property sank by 26.79 points or 1.01% to 2,624.91; and holding firms fell by 13.32 points or 0.22% to 5,961.15.
Value turnover slipped to P4.48 billion on Friday with 348.61 million shares changing hands from the P4.92 billion with 343.14 million issues seen on Thursday.
Decliners outnumbered advancers, 104 versus 66, while 57 names closed unchanged.
Net foreign selling stood at P566.44 million on Friday versus the P76.12 million in net buying seen on Thursday.
The market is closed on Monday in observance of Ninoy Aquino Day. — A.H. Halili with Reuters
This article originally appeared on bworldonline.com