PH stocks slip on weaker US GDP; peso gains - TrueID

PH stocks slip on weaker US GDP; peso gains

Philippine News AgencyJuly 29, 2022

GROWTH CONCERNS. Weaker-than-expected second-quarter output of the US economy made investors worry of its impact on the global economy, resulting in the slide of the main stock index. However, the peso gained against the US dollar on the latter's general weakness after the growth report. (PNA file photo)

MANILA – The main equities index ended its rally on Friday on softer US second quarter growth while the peso gained against the US dollar.

The Philippine Stock Exchange index (PSEi) declined by 0.99 percent, or 63.33 points, to 6,315.93 points.

All Shares slipped by 0.76 percent, or 26.14 points, to 3,398.82 points.

Most of the sectoral indices also finished in the negative territory, led by Holding Firms after it dipped by 2.38 percent.

It was trailed by Industrial, 1.96 percent; Mining and Oil, 0.21 percent; and Property, 0.07 percent.

On the other hand, Services rose by 0.63 percent and Financials by 0.39 percent

Volume is still thin at 566.04 million shares amounting to PHP18.05 billion.

Decliners surpassed advancers at 116 to 74, while 50 shares were unchanged.

“Philippine shares were sold to close the month after successive bargain hunting session, as they became wary of the negative US GDP (gross domestic product) reading,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

The US reported a -0.9 percent growth in the second quarter, lower than expectations of a 0.3 percent expansion and follows a -1.6 percent print in the previous three months.

“The slowdown in growth made the markets bet that the Fed (Federal Reserve) would slow its aggressive hiking campaign,” Limlingan said.

Meanwhile, the local currency improved against the US dollar and closed at 55.13 from 55.82 on Thursday.

It opened the day at 55.75 and traded between 55.75 and 55.05.

The average level for the day stood at 55.322.

Volume reached USD1.58 billion, higher than the previous session’s USD1.27 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the local unit closed to its strongest in more than three week or since July 4, 2022 when it closed at 55.08.

He attributed the peso’s appreciation to the correction in the greenback following the lower-than-expected expansion of the US economy, which “could already signal risk of recession.”

He added US initial jobless claims data is also not a rosy picture to date.

Another factor that supported the peso during the day is the drop in the prices of oil in the international market to its around three-month low, he said.

He forecasts the peso to be traded between 54.90 to 55.20 Monday next week, while forecast level for the whole week is between 54.80 to 55.40. (PNA)

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