Disappointing GDP data drag PSEi to 6,500 level

REUTERS

PHILIPPINE SHARES plunged to the 6,500 level on Thursday as the country’s economic growth for the first quarter came below expectations.

The bellwether Philippine Stock Exchange index (PSEi) dropped by 1.75% or 116.72 points to end at 6,542.46 on Thursday, while the broader all shares index retreated by 0.99% or 35.02 points to close at 3,481.55.

“The local market plunged by 116.72 points (1.75%) to 6,542.46 as investors were weighed down by the dismal first quarter gross domestic product (GDP) data, with growth coming in at 5.7%, falling below expectations and the government’s target range of 6-7%,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“This raised worries over the country’s economy amid the lingering headwinds including inflation and elevated interest rates,” he added.

Last quarter’s GDP growth print was the faster than the 5.5% seen in October to December 2023. However, this was slower than 6.4% in the same quarter last year and below the 5.9% median forecast in a BusinessWorld poll of 20 economists conducted last week.

“The local stock market faced a setback following the disappointing first quarter GDP figures… This was primarily attributed to subdued household spending, which grew by a mere 4.6%, marking its slowest pace since 3Q10, amidst persistent inflationary pressures and the ongoing El Niño phenomenon,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

“Looking ahead, attention in the US market remains focused on the impending release of weekly jobless claims data set for Thursday,” he added.

Almost all of the market’s sectoral indices ended lower on Thursday, with industrials being the lone gainer, rising by 0.4% or 36.47 points to 9,091.49.

Meanwhile, holding firms dropped by 3.02% or 181.36 points to 5,817.05; financials went down by 2.03% or 41.97 points to 2,024.95; property declined by 1.45% or 36.07 points to 2,438.37; mining and oil fell by 1.06% or 97 points to 9,007.88; and services retreated by 0.73% or 14.49 points to 1,945.47.

“Among the index members, ACEN Corp. was at the top, climbing 8.61% to P4.54. JG Summit Holdings, Inc. lost the most, dropping 4.88% to P31.20,” Mr. Plopenio said.

“Additionally, the decline of the heavyweights SM Investments Corp. and SM Prime Holdings, Inc. dragged the performance of the main index this Thursday,” he added.

Value turnover rose to P6.73 billion on Thursday with 490.88 million issues switching hands from the P5.98 billion with 434.16 million shares traded on Wednesday.

Advancers beat decliners, 95 against 87, while 43 issues ended unchanged.

Net foreign selling rose to P1.52 billion on Thursday from P9.45 million on Wednesday. — R.M.D. Ochave