AFP FILE PHOTO
THE LOCAL stock barometer fell sharply on Friday, closing below the 7,000 mark, as investors digested the weaker-than-expected third quarter domestic economic growth while regional markets were tempered by China and European Central Bank woes.
The Philippine Stock Exchange index lost 136.18 points or 1.93 percent to close at 6.927.07 amid mostly weaker regional markets.
The Shanghai and Hong Kong stock markets were also heavily battered while trading was muted in Jakarta, Japan, Malaysia, Singapore, Taiwan and Thailand.
At the local market, all counters tumbled, led by the holding firms – deemed as a proxy to the domestic economy- which fell by 2.57 percent. The financial, industrial and property counters also slid by over 1 percent.
“The stock market index was weak on the back of weaker than expected third quarter GDP (gross domestic product) growth figure. While the 6 percent third quarter GDP growth figure was robust, market expectations need to be adjusted downwards,” said Michaelangelo Oyson, chief executive officer of BPI Securities.
Market consensus had expected a slightly higher growth Philippine GDP growth rate of 6.3 percent for the third quarter.
There were also selling pressures ahead of the local weekend break, said Joseph Roxas, president of local stock brokerage Eagle Equities Inc. There is no trading on Monday (Nov. 30), a non-working holiday in observance of Bonifacio Day.
Investors typically want to lock up gains in case of detrimental surprises during long holidays.
Value turnover for the day was heavy at P16.42 billion. There were nearly twice as many decliners (111) as there were advancers (60).
“Government needs to achieve a very challenging 7.2 percent growth in the fourth quarter to achieve a 6 percent 2015 (growth) average. In the meantime, the negative “Yellen” effect arising from a possible December interest rate lift-off could negate the usual market uplift from elections,” he said. He was referring to expectations that the US Federal Reserve (Fed), which is led by chair Janet Yellen, would raise interest rates for the first time in a decade this December.
Elsewhere in the region, sentiment was also curbed by concerns on the Chinese economy alongside jitters ahead of European Central Bank’s monetary setting.
But Oyson said while the local market also tracked the regional slump, the local market was mostly digesting the third quarter GDP numbers reported on Thursday.
A Fed-lift off, he said, would even that the US Fed was more confident about China’s relatively sound footing. “The Fed is both data dependent and market dependent with regards to emerging markets,” Oyson said.
“Going forward, however, GDP growth will likely be above 6 percent as government expedites or front-loads the government projects ahead of the elections and given the low base effect during the first half of the year,” he added.
JG Summit was among the steepest PSEi decliners, falling by 4 percent while SMIC declined by 3.98 percent. Banco de Oro also slipped by over 3 percent.
ALI, BPI and Jollibee all tumbled by over 2 percent while URC, SM Prime, AEV, AC, AP, MPI, GTCAP and ICTSI all lost over 1 percent.
Among the few that bucked the day’s downturn were RLC, PLDT and Globe.