Stocks decline on foreign selling after GDP data

SHARES opened the week on a negative note as investors continued to sell their holdings following a weaker-than-expected third-quarter gross domestic product (GDP) growth print.
The bellwether Philippine Stock Exchange index (PSEi) fell 0.61% or 42.62 points to 6,926.20 on Monday. The broader all-shares index dropped 0.39% or 16.91 points to 4,252.97.
“Our index fell on heavy foreign selling…,” Timson Securities, Inc. trader Jervin S. de Celis said in a mobile message on Monday.
Foreigners dumped a net P608.95 million worth of shares yesterday, albeit easing from Friday’s P598.19-million net outflow.
“This could be a continuation of last week’s sentiment after our 3Q GDP missed forecasts and there are no fresh catalysts to lift our market,” Mr. De Celis added.
GDP grew by 6.1% annually in the July-September period, slower than the revised 6.2% in the preceding quarter and the 7.2% growth logged in comparable period in 2017.
This brought GDP growth in the first three quarters to an average of 6.3%, slower than the 6.8% in the same period last year and below the government’s target of 6.5-6.9% for 2018.
Meanwhile, investors’ wait-and-see stance pending this week’s release of US consumer price index data for October may have played a part in Monday’s market performance, Mr. De Celis said.
He said the data “will determine whether the US Fed[eral Reserve] will remain hawkish or dovish with their stance for the December meeting.”
Another analyst said overseas markets may also help determine the PSEi’s opening performance today, but most will be banking on remaining corporate financial reports.
“Earnings may be the only fulcrum for sentiments to turn on for the balance of the week — or month — as investors grapple with, and incorporate into their expectations, slower GDP and elevated inflation,” Justino B. Calaycay, Jr., Philstocks Financial, Inc. senior research analyst, said in a note on Monday.
“The BSP’s (Bangko Sentral ng Pilipinas) rate decision at mid-week, with the market largely expecting the regulators to keep their hands off the tweak button, could be a trigger,” Mr. Calaycay added.
He noted that the index has been hovering below the 7,000-mark for two consecutive days now. This puts support at the 6,900 level.
Most counters ended in negative territory on Monday. Industrials shed 1.07% or 113.33 points to close at 10,463.92; holding firms slid 0.95% or 65.85 points to 6,848.37; financials declined 0.57% or 9.02 points to 1,563.51; and services decreased 0.48% or 6.65 points to 1,376.93.
On the other hand, mining and oil went up 0.46% or 42.75 points to 9,162.97 and property inched up 0.23% or 8.12 points to 3,398.58.
Decliners trumped advancers, 127 to 68, while 44 names were unchanged.
A total of 883.54 million shares changed hands, yielding a P6.64-billion value turnover, up from Friday’s P5.96 billion. — Janina C. Lim