PHILIPPINE STOCKS went down on Thursday following the MSCI rebalancing and weak US private payrolls and Chinese manufacturing activity data.

The Philippine Stock Exchange index (PSEi) fell by 120.04 points or 1.9% to end at 6,175.25 on Thursday, while the broader all shares index dropped by 47.41 points or 1.4% to close at 3,334.78.

“Local investors followed the movement of the latest MSCI rebalancing to end the month of August, while others digested weaker-than-expected payrolls data and annual gross domestic product growth forecast that nevertheless suggested the Fed could soon be done hiking rates, boosting equities,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Worries over China’s economy weighed on sentiment as the country’s official manufacturing PMI (purchasing manager’s index) for August came in at 49.7, showing a fifth straight month of contraction. The lack of a positive catalyst also added to the sell-off,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

The ADP National Employment Report released on Wednesday showed US private payrolls rose by 177,000 jobs in August after growing by 371,000 in July, signaling a softening labor market and boosting hopes that the US Federal Reserve could pause its tightening cycle again when it meets this month.

The Fed in July raised borrowing costs by 25 basis points (bps), bringing the central bank’s target rate to a range between 5.25% to 5.5%.

It has raised rates by a cumulative 525 bps since March last year.

Meanwhile, China manufacturing activity contracted for a fifth straight month in August but improved from July.

Data from the National Bureau of Statistics showed China manufacturing activity declined to 49.7 in August from 49.3 in July, below the 50-point level that separates expansion from contraction.

Back home, almost all sectoral indices declined on Thursday, except for mining and oil, which rose by 1.42 points or 0.01% to 10,083.72.

Meanwhile, property went down by 90.41 points or 3.48% to 2,507.86; services dropped by 31.73 points or 2.07% to 1,500.54; industrials decreased by 169.07 points or 1.9% to 8,689.90; holding firms declined by 93.95 points or 1.56% to 5,904.97; and financials lost 5.90 points or 0.31% to end at 1,850.03.

Value turnover rose to P9.75 billion on Thursday with 1.36 billion shares changing hands from the P3.97 billion with 672.71 million shares seen on Wednesday.

Decliners outnumbered advancers, 104 to 71, while 47 names closed unchanged.

Net foreign selling grew to P1.84 billion on Thursday from P375.70 million on Wednesday. — S.J. Talavera