PSE index slips as weak GDP data dent sentiment

The main index ended lower on Monday as cautious sentiment reigned following the Philippines’ weak second-quarter economic growth and continued uncertainty over the situation in the Strait of Hormuz.

The Philippine Stock Exchange index (PSEi) slipped by 0.02% or 1.14 points to close at 6,289.21. Meanwhile, the broader all shares index edged up by 0.07% or 2.37 points to end at 3,420.77.

“The local market posted a marginal decline as investors moved with caution following the Philippines’ dismal Q2 gross domestic product (GDP) print. Iran’s denial of talks with the US regarding the Strait of Hormuz also weighed on market sentiment,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The local bourse ended lower as trading remained relatively flat amid cautious sentiment. Investors are assessing the next market catalyst following the weak 2Q GDP print,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Attention now shifts to the Bangko Sentral ng Pilipinas’ (BSP) next policy move and its potential impact on market sentiment.”

Philippine GDP growth slowed to 2.3% in the second quarter from 5.4% in the same quarter last year and the 2.8% expansion in the first quarter. This was the slowest print since the fourth quarter of 2009, excluding the pandemic.

For the first semester, GDP growth averaged 2.6%, below the government’s 3.5%-4.5% full-year target.

BSP Governor Eli M. Remolona, Jr. said on Monday that the central bank is ready to tighten its policy stance further to bring down elevated inflation but said there is less pressure to do so after GDP growth hit a new post-pandemic low last quarter.

The Monetary Board in June raised benchmark interest rates by 25 basis points for a second straight meeting to bring the policy rate to 4.75%. Its next review is on Aug. 27.

Majority of sectoral indices closed in the red. Industrials decreased by 0.47% or 37.91 points to 8,092.23; services went down by 0.22% or 7.72 points to 3,467.51; mining and oil retreated by 0.17% or 31.89 points to 18,273.41; and property slipped by 0.03% or 0.48 point to 1,915.06.

Holding firms went up by 0.98% or 43.56 points to 4,508.19, and financials increased by 0.1% or 1.86 points to 1,895.50.

Advancers beat decliners, 113 to 75, while 63 names were unchanged.

“DigiPlus Interactive Corp. was the day’s index leader, climbing 3.77% to PHP 10.46. Semirara Mining and Power Corp. was the main index laggard, falling 3.9% to PHP 19.22,” Mr. Tantiangco said.

Value turnover went down to PHP 4.096 billion on Monday with 621.75 million shares traded from the PHP 6.23 billion with 606.90 million issues on Friday.

Net foreign selling dropped to PHP 217.28 million from PHP 327.51 million in the previous session. — A.G.C. Magno