Weak China growth dampens Phl stocks

MANILA, Philippines - Philippine share prices retreated for the second consecutive session yesterday despite a hot start as external factors weighed down the benchmark index.

The Philippine Stock Exchange index (PSEi) successfully touched the 7,500 mark with an intra-day high of 7,508.77.

The PSEi, however, failed to hold on to its early gains as it ended losing 0.43 percent or 32.51 points at 7,452.81 while the All Shares index likewise slipped 0.42 percent or 18.48 points to close at 4,366.13.

“Another mixed tone was expected as foreign players checked on funds flow given China market’s sharp retreat,” said Jason T. Escartin, investment analyst at F. Yap Securities.

China yesterday released its fourth quarter gross domestic product (GDP) which grew 7.3 percent, its slowest pace in 24 years.

Aside from China’s GDP outcome, the International Monetary Fund’s decision to lower its forecast for global economic growth this year also put more anxiety to investors yesterday.

“Another possible source of concern for the global picture emerged after the IMF, citing strong and complex cross currents pared its global growth forecast by the most in three years. It likewise voiced a long-held view (fear) of potential capital flight out of emerging markets once the Federal Reserve begins to raise US interest rates,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp.

As a result, the local market saw a bloodbath with all counters finishing in the red. Mining and oil firms took the biggest blow declining 2.91 percent followed by services firms which dropped 0.52 percent.

Decliners pummeled advancers, 114 to 71, while 39 securities were unchanged.

Value turnover fell slightly to P8.30 billion from the previous day’s P8.06 billion.