LOCAL shares ended flat on Friday as market sentiment was dampened by Chinese retail sales and industrial output data showing continued weakness in the world’s second largest economy.
The bellwether Philippine Stock Exchange index (PSEi) inched up 0.02% or 1.45 points to close at 7,524.37 on Friday. The broader all-shares index was down by 0.02% or 0.83 points to 4,506.50.
“Our index ended flat today despite rising by as high as 7,559 and this is probably influenced by the disappointing Chinese retail sales data that was released today,” Jervin S. de Celis, equity trader at Timson Securities, Inc. said in a message on Friday.
“I assume this slowdown in the Chinese economy has dampened market sentiments today that led to the PSEi’s flat closing,” he added.
Reuters reported China’s November retail sales grew by 8.1%, the weakest pace since 2003 and below expectations. Industrial output went up by a disappointing 5.4% year-on-year in November, matching same level in January-February 2016.
Mr. de Celis noted this could be an effect of the ongoing trade dispute between the US and China.
“Since China is our largest trading partner, any deceleration in their economy won’t be beneficial to ours so if this trend continues, the Chinese government may implement some fiscal and monetary measures to support growth next year,” he noted.
Most of the sub-indices ended in the red. Losers were led by mining and oil which was down by 0.99% at 8,198.55, and property which fell O.20% to 3,641.17. Holding firms slipped 0.20% to 7,430.11, while financials closed 0.14% lower to end at 1,785.55.
On the other hand, services went up by 1.33% or 18.71 points to 1,431.07, and industrial rose by 0.79% or 86.06 points to 10,963.
Some 1.272 billion shares valued at P6.847 billion switched hands on Friday, up from Thursday’s P6.09-billion value turnover. Advancers beat decliners, 100 to 79, while 42 names remained unchanged.
Foreign selling was logged at P691.235-million on Friday, a reversal of Thursday’s net purchases worth P324.84-million.
“We continue to monitor the VIX fear gauge (volatility measure based on S&P 500 options) as well, a good indicator of investor sentiment. We’ve seen the VIX declining throughout the week in response to positive trade war developments. If this continues to improve, we may be able to look forward to a yearend rally,” Arbee B. Lu, head of online trading at Papa Securities Corp., said in an email.
Ms. Lu said the market is on its way to test resistance at 7,617 as long as it does not go beyond the 7,330 level.
Timson Securities’ Mr. De Celis said the PSEi may trade between 7,400 and 7,600 next week “as we wait for more catalyst to support the upward movement of our index.”
“Investors may take some cues in the upcoming FOMC meeting and their projections for the US economy for 2019. If rates remain unchanged, foreign selling in our market may take a breather at least for a few days,” he said, referring to the Federal Reserve’s Dec. 18-19 meeting. — Vincent Mariel P. Galang

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