Shares hit two-month low on growth concerns

Philippine shares tumbled to a near two-month low on Wednesday due to a sell-off amid concerns over the economy’s growth prospects and continued uncertainty in the Middle East.

The Philippine Stock Exchange index (PSEi) slumped by 0.86% or 53 points to close at 6,137.23, while the broader all shares index fell by 0.52% or 17.87 points to end at 3,394.57.

This was the PSEi’s lowest finish in nearly two months or since July 2’s 6,125.72.

“The local index ended lower as selling pressure remained intact throughout the session. Market sentiment turned cautious following Moody’s forecast that Philippine GDP (gross domestic product) growth will remain below 6% over the medium term. Investors stayed on the sidelines as concerns over the country’s growth outlook continued to weigh on risk appetite,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Moody’s Ratings said the Philippines’ medium-term growth outlook seems bleak as slow investment recovery and its vulnerability to climate-driven shocks may derail its economic rebound.

The debt watcher said late on Monday that Philippine GDP growth is expected to hover below its pre-pandemic level of around 6% over the medium term.

It also slashed its growth forecast for this year to 3.6% from 5.5% previously. This is near the bottom end of the government’s 3.5%-4.5% target for the year.

“The local index extended its decline on Wednesday, bucking a broader rally across the region even as softer oil prices provided some relief. Oil prices fell after the US signaled a shift toward economic sanctions rather than immediate military action against Iran, easing concerns over renewed supply disruptions. The PSEi is now nearing the 6,100 mark amid a lack of fresh catalysts and a ninth straight day of foreign selling,” COL Financial Group Research Analyst Denise Joaquin said in a Viber message.

Net foreign selling increased to PHP 692.10 million on Wednesday from PHP 542.12 million in the previous session.

Ms. Joaquin added that index heavyweight International Container Terminal Services, Inc. was the main drag for the day as its share price lost 3% or PHP 28.50 to close the session at PHP 920.50 each.

Sectoral indices closed mixed. Financials rose by 0.3% or 5.86 points to 1,930.49; mining and oil increased by 0.14% or 28.17 points to 19,838.80; and industrials edged up by 0.02% or 1.43 points to 8,152.41.

Meanwhile, services declined by 2.47% or 82.21 points to 3,242.34; property dropped by 0.45% or 8.62 points to 1,889.54; and holding firms went down by 0.21% or 9.51 points to 4,425.95.

Decliners outnumbered advancers, 94 to 78, while 79 names were unchanged.

Value turnover rose to PHP 5.35 billion on Wednesday with 862.39 million shares traded from the PHP 5.27 billion with 800.44 million issues that changed hands on Tuesday. — Alexandria Grace C. Magno