MANILA, Philippines — Shares fell below the 6,500 mark anew yesterday as investor sentiment took a hit from the lower-than-expected second quarter economic growth.
The benchmark Philippine Stock Exchange index (PSEi) dropped to 6,449.66, down by 80.79 points or 1.24 percent, while the broader All Shares index slipped to 3,445.38, down by 34.78 points or one percent.
Total value turnover was thin at P3.6 billion. Market breadth was negative, 107 to 57, while 51 issues were unchanged.
Mikhail Plopenio of Philstocks Financial said the weaker second quarter economic growth weighed on sentiment. The Philippine economy grew by 4.3 percent during the second quarter, the slowest pace since the 3.8 percent growth in the first quarter of 2021.
“This came as the slowdown in government expenditures, higher consumer prices, and elevated interest rates took a toll on the country’s economy,” Plopenio said, adding that aside from the reaction to second quarter GDP, investors also traded cautiously ahead of the US inflation data for July.
Asian markets were mixed ahead of much-anticipated US inflation data, which comes against a backdrop of renewed concerns that the Federal Reserve could announce another interest rate hike before the end of the year.
The feel-good factor that characterized much of July has given way to uncertainty about the US central bank’s plans following a mixed jobs report and warnings from policymakers that more was needed to finally get prices under control.
Ongoing weakness in China’s economy – and lack of concrete action by authorities to address it – are also taking their toll on investor sentiment, helping to drive a retreat in global markets in recent weeks.
All eyes are on the release later Thursday of the US consumer price index for last month, a closely watched gauge of inflation that plays a key role in the Fed’s decision-making on monetary policy.
While rate hikes have dampened steep price rises – from a four-decade high of 9.1 percent in June last year to three percent now – observers warned officials would find it harder to get inflation back down to its two percent target.
After falling for 12 straight months, forecasts are for a slight uptick in the CPI, partly because of rising oil costs.