The stock market fell Friday in step with the rest of Asia on fears a drop in household spending may slow down the economic growth further.
The Philippine Stock Exchange Index dropped 66.89 points, or 1 percent, to 6,968.82 on a value turnover of nearly P6 billion. Gainers, however, beat losers 105 to 84, with 53 issues unchanged.
PLDT Inc., the biggest telecommunications company, slumped 5 percent to P1,220, while Globe Telecom Inc., the second-largest, tumbled 5.2 percent to 1,728.
Bank of the Philippine Islands, the third-biggest lender in terms of assets, lost 3.4 percent to P80, but ISM Communications Corp., whose group was provisionally declared the country’s third major telecommunications firm, surged 8 percent to P6.80.
Economic Planning Secretary Ernesto Pernia earlier expressed concern on the marked slowdown in household spending on food and other basic products after the inflation rate hit a nine year high of 6.7 percent in September.
The 5.2-percent expansion in household consumption in the third quarter was the slowest since the 5 percent recorded in the third quarter of 2014. A slower household spending could foreshadow further slower economic growth.
The rest of Asian markets, meanwhile, turned lower Friday as investors took their foot off the pedal at the end of a broadly positive week, while the dollar strengthened after the Federal Reserve flagged more interest rate hikes down the line.
US markets closed mostly lower, with Asian equities following suit.
Tokyo closed down 1.1 percent.
Hong Kong shed 2.3 percent and Shanghai finished 1.4 percent lower after data showed another drop in Chinese factory prices, while tech firms were hit by a series of weak earnings results from mainland firms.
“China producer’s inflation is cooling as manufacturing activity is receding damping price pressures on raw commodities, yet another casualty of US-China trade wars,” said Stephen Innes, head of Asia-Pacific trade at OANDA. “The decline in the PPI underscores increased economic pressures.”
Sydney eased 0.1 percent, Singapore sank 0.6 percent and Seoul was off 0.3 percent. Taipei and Jakarta were all down more than one percent.
Energy firms were among the biggest losers as oil prices fell into a bear market after dropping 20 percent from their recent highs.
The US midterms provided a much-needed fillip to equities as traders bet that the expected gridlock on Capitol Hill would keep Donald Trump from pushing through measures that would likely stoke inflation and in turn rate hikes.
Rising US borrowing costs have been one of the major issues weighing on global equities this year.
However, after its latest policy meeting Thursday the Fed repeated that it expected “further gradual increases” in the key interest rate as the economy goes from strength to strength.
The central bank said growth “has been rising at a strong rate,” jobs were picking up, unemployment dropping and household spending “growing strongly.”
While it did not lift rates, observers said another move upwards next month was all but nailed on. With AFP