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Bourse wobbles in wake of economic data, hawkish policy action

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PSE

THE BOURSE continued to reel from worrisome economic data that peppered this week, seesawing between muted gains and losses for much of Friday but ending relatively flat and capping recent week-on-week increases.

The Philippine Stock Exchange index (PSEi) gave up 15.73 points or 0.2% to finish 7,804.98, falling 0.19% on the week, while the all-shares index slipped by 1.13 points or 0.02% to end 4,714.69.

Friday saw a roller coaster ride for PSEi, which opened Friday 0.21% down at 7,804.02 from Thursday’s 7,820.71 finish, went up 0.25% to peak at 7,840.63 and dropped 0.497% to a 7,781.82 low.

Only one of the six sectoral indices closed with gains, while foreigners turned bearish after two straight days of net buying.

“The market was indecisive throughout the day as it was probably still digesting the disappointing 2Q GDP growth and the BSP’s 50bps rate hike,” RCBC Securities, Inc. said in a Stock Market Weekend Recap attributed to research analyst John Paolo D. Ayson, noting that “[f]oreigners were heavy net sellers today” and that “[v]alue turnover remained thin”.

Friday saw 1.5-billion shares worth P8.33 billion change hands, a third bigger than Thursday’s 1.127 billion shares worth P6.331 billion.

This week began with an official report showing that July inflation spiked to a nearly 10-year-high 5.7% — piercing market expectations, as well as marking the seventh consecutive month of acceleration and the fifth straight month that the central bank’s 2-4% full-year 2018 target range was breached — taking the year-to-date pace to 4.5% against monetary authorities’ upgraded 4.9% full-year forecast average.

The Philippine Statistics Authority then went on last Thursday to report a disappointing six percent second-quarter gross domestic product (GDP) growth that compared to January-March’s downward-revised and the past year’s 6.6%, taking last semester’s pace to 6.3% — against the government’s 7-8% full-year 2018 target and the 6.6% clocked in the first semester of 2017.

The slew of these and other economic data convinced the central bank’s Monetary Board to deliver a 50-basis point hike in benchmark interest rates on Thursday, marking the third straight time this year and in nearly four years that policy rates increased, with the latest hike being the most aggressive in a decade.

The mood elsewhere was predominantly bearish.

Wall Street dropped — largely due to losses in energy and financials, according to Reuters — with the Dow Jones Industrial Average and the S&P 500 Index giving up 0.29% to 25,509.23 and 0.14% to 2,853.58, respectively, while the Nasdaq Composite Index edged up by 0.04% to 7,891.78.

Asia was mixed, with Japan’s Nikkei 225 and TOPIX Index shedding 1.33% and 1.15%, respectively, while Hong Kong’s Hang Seng Index dropped 0.84%.

On the other hand, the Shanghai SE Composite Index added 0.04% while the blue-chip Shanghai-Shenzhen CSI 300 went up by 0.22%.

At home, only mining & oil closed Friday with gains: 73.76 points or 0.71% at 10,325.65.

The five others lost: holding firms by 19.02 points or 0.24% at 7,723.13, industrials by 25.42 or 0.22% at 11,134.46, services by 3.06 points or 0.19 at 1,535.4, financials by 0.88 of a point or 0.04% at 1,854.77 and property by 1.24 points or 0.03 at 3,890.5.

Stocks that gained narrowly outnumbered those that lost 96 to 86, while 51 others were flat.

Nine of Friday’s 20 most active stocks lost, nine gained and two ended flat.

Those that lost included Ayala Corp. which dropped 2.48% to P985 apiece; Security Bank Corp. that gave up 1.28% at P200 and Bloomberry Resorts Corp. that fell by 1.13% to finish 10.50 each.

Those that gained included San Miguel Corp. which increased by 3.4% to close P143 each; PLDT, Inc. that rose by 2.08% to P1,375; Robinsons Land Corp. that added 1.9% to P21.40; Alliance Global Group, Inc. which climbed 1.29% to P12.58 and Metropolitan Bank & Trust Co. that went up by 1.05% to finish P77.20 apiece.

SM Prime Holdings, Inc. and Melco Resorts and Entertainment (Philippines) Corp. closed flat at P38.50 and P7.50, respectively.

Offshore investors turned predominantly bearish, with Friday ending with P515.885-million net sales that were a reversal from Thursday’s P322.97-million net acquisitions, as total buying dropped a fourth to P2.234 billion from P2.971 billion, while total selling edged up 3.86% to P2.75 billion from P2.648 billion.