Fed triggers stocks’ decline
The local stock index Thursday retested the 6,000 support level after the US Federal Reserve announced a cut in the monthly monetary stimulus by another $10 billion.
However, the decline in share prices was tempered by the favorable fourth quarter economic growth data.
The main-share Philippine Stock Exchange index slipped by 28.65 points, or 0.47 percent, to close at 6,041.19. This was after it dropped to as low as 5,984.12 in early trade.
For the week, the PSEi slipped by a total of 150.31 points, or 2.4 percent.
Friday’s downturn was primarily due to the US Federal Reserve’s decision to further its monthly bond buying operations, causing downward pressure in global markets. Overnight, the Dow Jones Industrial Index slid by 1 percent.
But after the fourth quarter Philippine gross domestic product growth level turned out at a better than expected 6.5 percent (bringing full year growth to 7.2 percent), the index cut its intraday losses on bargain-hunting.
Most traders expected growth in the fourth quarter to come in at only 6 percent.
Value turnover for the day amounted to P8.85 billion. There were 48 advancers against 109 decliners, while 42 stocks were unchanged.
Local stock brokerage DA Market Securities said if the index broke through the 6,000 level, it could lead to a retest of lower supports at 5,700 and 5,800.
“However, bargain hunting may pick up anew ahead of corporate earnings,” it added.
If the 6,000 support holds, DA Market said a retest of the resistance levels at 6,200 to 6,250 and the pivotal 6,400-6,500 would be possible.
Investors sold down shares of Jollibee (-3.18 percent) alongside ALI, URC, BDO and DMCI, which all tumbled by over 1 percent.
PLDT, Metrobank, AGI, Ayala Corp., SMIC and ICTSI also contributed to the day’s decline.
Among those that bucked the downturn were SMPH (+2.24 percent) BPI, LTG and AP.
Outside of the main index, Del Monte (+5.5 percent) performed well, along with Meralco (+1 percent). Doris C. Dumlao
