Philippine shares sag on profit taking

MANILA, Philippines — Local shares slid yesterday due to profit taking after China reported weaker growth than forecast in the last quarter.

The benchmark Philippine Stock Exchange index (PSEi) closed 74.03 points or 1.1 percent lower  at 6,550.76 while the broader All Shares index plunged by 22.17 points or 0.63 percent to 3,493.64.

All sectoral gauges were down. Total value turnover was thin at P2.987 billion and market breadth was negative, 94 to 85 while 56 issues were unchanged.

Claire Alviar of Philstocks Financials, said that investors took some gains after five consecutive days of market rally.

“Moreover, the sentiment was further dampened as China’s economy missed expectations, with a growth rate of 6.3 percent compared to the anticipated 7.3 percent. This adversely affected sentiment in Asia as many countries in the region are either China’s trading partners or have some form of connection with the country,” Alviar said.

Despite the market decline, foreigners registered a net inflow of P214.16 million.

China reported economic growth of 0.8 percent in the second quarter, above the 0.5 percent forecasted, while the annual pace slowed more than expected to 6.3 percent, well below expectations for a reading of 7.3 percent.

Last week brought a broad sweep out of the dollar and into risk assets like equities and emerging market currencies, as well as into bonds, after a cooler reading of US consumer inflation was enough to convince investors that the Federal Reserve could deliver the final rate hike of its monetary policy cycle this month.

The dollar, which fell 0.1 percent against a basket of major currencies yesterday, staged its biggest weekly fall of 2023 last week, dropping 2.3 percent, as traders rushed to price out the chances of a September rate rise.

This week’s data macro calendar is light and Fed officials are now in their “blackout period” ahead of the July policy meeting, leaving investors with the big question of whether last week’s market moves will continue or reverse.