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Philippines
Thursday, March 28, 2024

Market extends retreat; GT Capital, Meralco drop

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Stocks fell Thursday in further consolidation, with select blue chips retreating after registering gains as investors continued to take profits.

The Philippine Stock Exchange Index dropped 28.25 points, or 0.3 percent, to 8,820.74 on a value turnover of nearly P10 billion. Gainers, however, edged losers, 113 to 103, with 54 issues unchanged.

GT Capital Holdings Inc. of tycoon George Ty slumped 3 percent to P1,309, while conglomerate Ayala Corp. declined 2.4 percent to P1,035.

BDO Unibank Inc., the biggest lender in terms of assets, lost 1.9 percent to P157, while Manila Electric Co., the largest retailer of electricity, slipped 1.3 percent to P326.40. 

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Hong Kong stocks, meanwhile, closed at another record high on Thursday, extending a rally in line with global markets, following data showing China’s economy grew much more than expected last year.

The Hang Seng Index climbed 0.43 percent, or 138.53 points, to finish at 32,121.94.

The benchmark Shanghai Composite Index rose 0.87 percent, or 30.08 points, to 3,474.75 and the Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 0.13 percent, or 2.46 points, to 1,924.20.

Investors tracked another milestone on Wall Street but Asia-wide markets struggled to keep up the recent momentum.

But while the afternoon saw a slight wobble across the region and some analysts warned of a possible correction, traders remain bullish on equities thanks to a healthy global economic outlook, optimism over the impact of Donald trump’s tax cuts and strong corporate earnings.

Market closed data showed the Chinese economy grew a forecast-beating 6.9 percent in 2017, the first annual improvement since 2010.

Analysts surveyed by AFP had predicted 6.8 percent growth, which was better than the government target of around 6.5 percent.

Seoul was slightly higher, while Taipei, Bangkok and Jakarta also rose.

However, Tokyo dipped 0.4 after a late sell-off on profit-taking but still sits at 26-year highs, while Sydney was marginally lower and Singapore shed 0.5 percent. Wellington was also down.

A survey by Bank of America found fund managers were upbeat about the outlook and see equities continuing to rise into next year.

And Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors, told Bloomberg Television: “It’s time for relative caution but we’re still overall pro-equity.”

However, she added that “nominal returns in markets are liable to be lower than they’ve been in the recent past.”

There was also a word of caution from Joachim Fels at Pacific Investment Management, who said “the fact that the fear is gone is the main reason why we should be worried.”

Traders started on the front foot after Apple said will pay almost $40 billion in taxes to repatriate $350 billion following Trump’s tax cuts, adding that it will also boost jobs, hike wages and spend more on innovation. 

“This is exactly the encouragement that Trump’s tax policy constructed for. The move by Apple will influence and at the same time impose pressure on other multinationals to follow suit,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers. With AFP

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