PHILIPPINE shares are expected to maneuver sideways this week as investors digest the slower-than-expected third-quarter economic growth and await the discharge of foreign direct investment (FDI) data.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) declined by 1.31% or 76.22 points to shut at 5,759.37, while the broader All Shares index slipped by 0.81% or 28.86 points to three,514.57. This marked the PSEi’s lowest finish in greater than three years, or because it closed at 5,783.15 on Oct. 3, 2022.
“The Philippine market ended lower as selling pressure persevered following the discharge of GDP (gross domestic product) data, which got here in widely below consensus,” said Regina Capital Development Corp. Head of Sales Luis A. Limlingan in a Viber message.
“Corporate earnings weren’t strong enough to offset the negative impact of the weaker GDP print and the depreciation of the peso to P59 per US dollar.”
Data from the Philippine Statistics Authority (PSA) showed that GDP expanded by 4% yr on yr within the third quarter, slowing sharply from 5.5% within the previous quarter and 5.2% in the identical period a yr earlier.
This was the weakest pace of growth in greater than 4 years, because the economy was weighed down by weak capital spending and typhoon damage to agriculture, while public construction was affected by a corruption scandal involving state infrastructure projects that dampened sentiment.
Online brokerage 2TradeAsia.com said the economy’s slowdown reflected the combined impact of those domestic headwinds, although resilient 5.5% growth in services, led by finance and trade, along with expected holiday spending, could help cushion fourth-quarter activity.
“Sessions breached their lowest since October 2022 after the GDP got here in lower than expected at 4%,” the brokerage said. “The PSEi’s muted dip masks rotation potential — we reiterate secure plays for now, resembling banks and dividend portfolios.”
For this week, Philstocks Financial, Inc. Assistant Manager for Research and Online Engagement Claire T. Alviar said the local bourse is prone to move sideways as cautious sentiment continues to weigh on investors.
“A robust FDI print could help lift confidence, but a disappointing result may reinforce the prevailing bearish mood,” Ms. Alviar said in a market note.
“Locally, the potential impact of an approaching super typhoon could further dampen sentiment, especially after the recent destructive typhoon within the Visayas.”
Last week, the federal government declared a state of national calamity after Typhoon Kalmaegi (locally named Tino) caused widespread damage within the Visayas and Mindanao. On Sunday, Super Typhoon Uwan was expected to hit areas still recovering from the previous storm.
Ms. Alviar added that concerns over a possible “AI-driven tech bubble” in overseas markets are also affecting risk appetite.
“Meanwhile, the local index didn’t sustain its position above the 5,800 support level. Bargain hunting may help it retest this level, although strong resistance on the 6,000 mark stays,” she said.
2TradeAsia noted that third-quarter corporate earnings calls could offer selective trading opportunities but said a stronger market recovery would likely hinge on fiscal reforms and clearer signs of economic rebound by early next yr.
“Recent themes underscore a low-conviction rate environment merging with domestic fiscal headwinds, tilting toward selective positioning over broad bets,” it said. “Expect funds to trim duration and rotate into defensive sectors — financials and consumer staples — which supply yield cushions amid GDP softness that risks spilling into the fourth quarter.”
The brokerage pegged the PSEi’s immediate support at 5,600 and resistance at 5,900 to six,000. — Alexandria Grace C. Magno