Market closes flat; Globe drops

The stock market closed virtually flat Thursday in cautious trading after a disappointing government report on the performance of the economy in the third quarter of the year.

The Philippine Stock Exchange Index added just 1.78 points, or 0.03 percent, to 7,035.71 on a value turnover of P8.4 billion. Losers, however, overwhelmed gainers, 132 to 70, with 50 issues unchanged

Growth in the gross domestic product slowed to 6.1 percent in the third quarter from 7.2 year-on-year and the revised 6.2 percent a quarter ago, pulled down again by the sluggish output of the agricultural sector and a decline in household consumption due to higher inflation.

Economic Planning Secretary Ernesto Pernia said trade, construction, and manufacturing were the main drivers of growth during the period.

ISM Communications Corp., a member of the group that provisionally won the slot for the country’s third major telecommunications company, surged 13.5 percent to P6.30, while conglomerate San Miguel Corp. climbed 3.9 percent to P170.

LT Group Inc. of airline and tobacco tycoon Lucio Tan rose 2.4 percent to P15.16, but Globe Telecom Inc., the second-biggest telecom firm, fell 5 percent to P1,823.

The rest of Asian markets mostly rose Thursday, building on a global rally as investors bet that gridlock in Washington will clip Donald Trump’s wings, preventing him from driving through measures that would likely push up US interest rates.

All three main Wall Street indexes ended more than two percent higher. And the positive mood was reflected in Asia, where Tokyo climbed 1.8 percent.

Hong Kong added 0.4 percent but Shanghai dipped 0.2 percent with investors unmoved by data showing Chinese exports jumped more than forecast in October. Analysts put the figures down to companies ramping up business before painful US tariffs kick in at the end of the year, with expectations for similar results tipped before January.

Seoul jumped 0.7 percent, Sydney and Wellington each put on 0.5 percent, and Taipei added 0.4 percent. There were also gains in Bangkok and Jakarta.

Attention now turns to the end of the Federal Reserve’s policy meeting later in the day, with its plans for hiking borrowing costs closely watched in light of the midterm election results.

Bets the central bank would lift rates again next month and continue to do so through 2019 have been a major cause of worry on trading this year but with the chances of more Trump tax cuts greatly reduced, expectations have been tempered.

However, analysts do not expect the Fed to alter its most recent outlook for the economy, with Ian Shepherdson of Pantheon Macroeconomics, saying: “The economic picture hasn’t changed meaningfully since the September meeting, despite the gyrations in the stock market.”

But with Democrats now controlling the House and ready to hold the president to account, observers expect them to push back against a number of his measures, though work with him on others such as infrastructure spending leading into the 2020 vote. With AFP

Topics: stock market , Philippine Stock Exchange Index , Ernesto Pernia , ISM Communications Corp. , Globe Telecom Inc.
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