LOCAL STOCKS fell anew on Friday as investors factored in a possible rate hike due to the higher-than-expected August inflation, alongside renewed global trade concerns.
The Philippine Stock Exchange index lost 40.07 points or 0.53% to close at 7,598.64. The broader all-share index was also down by 5.24 points or 0.11% to reach 4,656.42.
PNB Securities Inc. President Manuel Antonio G. Lisbona attributed Friday’s decline to “investors’ belief that the market is expensive”, after inflation surged to a nine-year high of 6.4% in August which bolstered expectations of another rate hike by the central bank.
“Combining these with outside factors that seem to have no resolution in sight (US/China/EU/Canada trade concerns), both sentiment and environment encourage a risk-off attitude in an already fragile market,” Mr. Lisbona said.
For Luis A. Limlingan, sales head at Regina Capital Development Corp, local stocks slipped as China fell into bear market territory, while investors stayed on the sidelines, waiting for developments US-China trade war.
“All eyes were on the impending US tariffs of $200 billion as China says it will retaliate. After the US was set to impose tariffs of $200 billion on China, an article from the WSJ (Wall Street Journal) cited that Japan may be next in trade fight which had the JPY (Japanese yen) moving lower,” he said.
The Hong Kong’s Hang Seng went down by 0.01% or 1.35 points, while Shanghai Composite Index gained 0.40% or 10.71 points.
On Wall Street, the Dow Jones Industrial Average rose 20.88 points or 0.08% to 25,995.87; the S&P 500 lost 10.55 points or 0.37% to 2,878.05; and the Nasdaq Composite dropped 72.45 points or 0.91% to 7,922.73.
At the PSE, foreigners continued to dump shares, with net selling at P1.42 billion, higher than Thursday’s net selling worth P1.02 billion.
“Foreign selling continues to be the bane for the index after the higher than expected August inflation figure of 6.4% really disappointed the market — and likewise weakened the Peso to approach the P54/USD level,” Gabriel Jose F. Perez, sales associate at Papa Securities Corp. said.
“We should remain vigilant if foreign selling continues next week, more so that the PSEi is already in the area of its support level at 7,500. External issues to watch out for over the weekend and next week would be the US — China trade war, and potential developments in emerging markets like Turkey and Argentina which might weigh again on global uncertainty,” he added.
For Mr. Lisbona, the market could move between 7,500 and 7,850 next week, but could go down to 7,200 if the support is breached.
The peso weakened against the dollar on Friday, closing at P53.8 — its worst in nearly 13 years since it closed at P53.985 in December 2005.
All counters, except industrial, finished in the red. Property fell by 57.89 points or 1.52% to close at 3,752.23, followed by holding firms (down 44.68 points or 0.59%); mining and oil (down 31.15 points or 0.32%); financials (down 6.98 points or 0.41%); and services (0.23 points or 0.02%).
The Industrial sub-index went up 115.55 points or 1.04% to close at 11,243.41.
On Friday, value turnover fell to P6.29 billion from Thursday’s P6.71 billion as 646.75 million issues changed hands.
Advancers edged out losers, 103 to 89, while 46 issues were unchanged. — Vincent Mariel P. Galang

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