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Thursday, March 28, 2024

Stock market declines; Now, BDO top gainers

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Stocks fell for a second day, following overnight losses on Wall Street amid worries about high valuation and despite the release of data showing the Philippines became the second fastest growing economy in Southeast Asia in the third quarter.

The Philippine Stock Exchange index, the 30-company benchmark, shed 67 points, or 0.8 percent, to close at 8,206.44 Thursday, as five of the six major sectors declined.

The broader all-share index also fell 29 points, or 0.6 percent, to settle at 4,834.68, on a value turnover of P7.9 billion.  Losers outnumbered gainers, 122 to 74, while 38 issues were unchanged.

BDO Unibank Inc. chief market strategist Jonathan Ravelas said the market was expected to move higher, after the government announced that the gross domestic product grew 6.9 percent in the third quarter, the second fastest in the region after Vietnam.  “The PSEi should retry 8,600 [points] and the peso should see 50.50 levels,” Ravelas said.

Six of the 20 most active stocks ended in the green, led by Now Corp., a new telecom player, which surged 10 percent to P3.09.  BDO Unibank, the country’s second largest lender,  climbed 3.6 percent to P146.10, while retailer Puregold Price Club Inc. gained 1.8 percent to P49.50.

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Meanwhile, most Asian markets edged up Thursday after a recent sell-off across global markets but gains were tempered as the optimism that pushed equities to multi-year highs last week gives way to investor caution.

Prices have been falling for much of the week as the sharp gains of October and early November led to profit-taking and worries about high valuations, while US lawmakers’ tax reform struggles are also dampening sentiment.

Eyes are on Washington as Republicans from each chamber of Congress provide differing plans to overhaul the tax system, raising concerns they will not be able to push anything through before the end of the year, as Donald Trump had hoped.

The most recent idea in the Senate is to repeal the Obamacare individual mandate as part of the plan, leading to speculation the legislation could collapse in the same way as their healthcare reforms.

“This is a classic omnibus political stunt to get an unattractive piece of legislation passed by stapling it to something that is likely to get passed,” Greg McKenna, chief market strategist at AxiTrader, said.

“But, given that such a move was already expressly voted down on the floor of the Senate, and taking into account resistance from House Republicans it may have just made the President’s Christmas timetable a little harder to meet.”

Failure of the bill could hit world equities, which have rallied on the back of hopes the market-friendly measures would be introduced.

On Wall Street all three indexes were sharply lower a week after posting record highs.

Tokyo, which had fallen for six straight days after hitting a 25-year high on Tuesday, jumped 1.5 percent, while Hong Kong added 0.6 percent and Shanghai put on 0.1 percent.

Sydney was 0.2 percent up and Seoul added 0.6 percent, while Wellington, Taipei and Manila were in positive territory.

With AFP, Bloomberg

However, Singapore shed 0.4 percent.

With oil prices creeping up slightly energy firms in Asia were mixed following this week’s big losses in the commodity.

Hong Kong-listed CNOOC was up 0.7 percent but PetroChina shed 0.4 percent, while Inpex in Tokyo lost almost two percent and Sydney-listed Rio Tinto ticked up.

Crude plummeted on Tuesday and Wednesday after the International Energy Agency cut its forecast for crude consumption for next year. That was compounded by data pointing to a rise in US stockpiles.

While official figures Wednesday showed the increase in reserves was not as big as expected, investors remain on edge, and there are also worries an OPEC-Russia output cut might not be extended.

“It sounds like there is some discourse between OPEC and non-OPEC in terms of not committing to something at the end of the month, and maybe kicking the can down the road,” Nick Holmes, an analyst at US-based Tortoise Capital Advisors LLC, told Bloomberg News. With AFP, Bloomberg

 

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