Stocks dip on GDP report

The local stock index on Thursday fell sharply as investors sold down equities due to the lower-than-expected economic growth in the first quarter.

The main-share Philippine Stock Exchange index lost 111.21 points, or 1.64 percent, to close at 6,676.67. Dealers said the market was disappointed with the first quarter gross domestic product growth rate of 5.7 percent, which was way below the 6.4-percent consensus forecast for the period.

All counters were sold down, but the most battered was the property counter (-2.4 percent), considered to be the most sensitive to economic cycles.

After breaking the 6,680 support level following the disappointing first quarter GDP print, the next support level to watch out for would be 6,600, said Manny Cruz of Asiasec Equities.

Jonathan Ravelas of Banco de Oro Unibank, said profit-taking was triggered by the disappointing first quarter GDP results. As a result, he said, the market now runs the risk of revisiting the 6,500-6,600 level.

April Tan of COL Financial said there would be “no rerating” in the stock market due to lower-than-expected GDP results. However, she said, the sharp sell-off was likewise “not justified.”

Gus Cosio of First Metro Asset Management Inc. said while the first quarter GDP results were below forecast, he did not considered it to be a disaster.

“It should bring valuations to realistic levels. For smart money, it’s opportunity,” he said, adding that the Philippine stock market still has a long way to go.

There were 133 decliners against 51 advancers, while 39 stocks were unchanged. Among PSEi stocks, the most notable decliner was ALI (-4.24 percent). Metrobank, Megaworld, AGI, ICTSI and Meralco likewise faltered by over 2 percent. PLDT (-1.59 percent) also dipped along with BDO, SMIC, AC, LTG, URC, AP, SM prime, Jollibee and BPI.

Outside of PSEi stocks, among the big decliners were Puregold (-4.39 percent) and Robinsons Retail (-0.55 percent).  Doris C. Dumlao