PH stocks drop below 6,000 amid DepDev’s dim economic outlook

Share prices declined Monday after the Department of Economy, Planning and Development (DepDev) said the government will likely miss its economic growth target for this year.

The main-share Philippine Stock Exchange index went down by 32.95 points or 0.55 percent to close at 5,989.29, while the broader all shares index slipped by 24.56 points or 0.69 percent to 3,543.78.

The peso appreciated slightly to 58.49 to the U.S. dollar on Monday from 58.645 on Friday.

DepDev Secretary Arsenio Baliscan said the economy is “very unlikely” to achieve its 5.5 percent to 6.5 percent growth target for this year after dismal third-quarter performance.

Average gross domestic product for the first three quarters of the year is at 5 percent. To meet its target, Baliscan said the economy should grow by 7 percent in the last quarter of the year.

Meanwhile, AB Capital Securities said the index broke below the 6,000 level as foreign selling on blue-chip companies accelerated. Foreign outflows reached P1.8 billion.

Four of six sectoral indexes ended in the red, led by holding firms, which declined 1.88 percent, while property decreased by 0.74 percent.

Mining and oil jumped 2.47 percent, while services advanced by 0.58 percent.

Value turnover amounted to P5.81 billion.

Market breadth, however, was positive as gainers outnumbered losers 99 to 97, while 65 stocks closed unchanged.

Asian and European equities were mixed Monday with investors awaiting the release of key US data that could play a role in Federal Reserve deliberations ahead of an expected interest rate cut next week.

After November’s end-of-month rebound across world markets, confidence remains high amid speculation the US central bank could continue easing monetary policy into the new year.

That has helped overcome lingering worries about an AI-fueled tech bubble that some observers warn could pop and lead to a painful correction.

While the odds on a third successive rate reduction on December 10 are hovering around 90 percent, traders will keep a close eye on this week’s batch of indicators to gauge the Fed’s desire to keep on cutting.

Among the reports due for release are private jobs creation, services activity and personal consumption expenditure — the Fed’s preferred gauge of inflation.

Bets on a cut surged in late November after several of the bank’s policymakers said they backed lower borrowing costs as they were more concerned about the flagging labour market than stubbornly high inflation.

That helped markets recover the losses sustained in the first half of the month, and analysts said they could be in store for an end-of-year rally.

“As the clouds of worry that cast an ominous shadow over markets through to mid-November gently dissipate, they give way to new emotions — notably the fear of not participating and the risk of underperforming benchmark targets,” said Pepperstone’s Chris Weston.

However, he warned that “risk managers remain highly astute to the landmines that could still derail the improving risk backdrop through December”.

He cited the possibility the Fed does not cut, or offers a “hawkish cut”, the Supreme Court’s possible decision on the legality of President Donald Trump’s trade tariffs, and jobs and inflation data.

Meanwhile, reports that Trump’s top economic adviser Kevin Hassett — a proponent of rate cuts — is the frontrunner to take the helm at the Fed next year added to the upbeat mood.

After last week’s healthy gains and Wall Street’s strong Thanksgiving rally, Asian equities were mixed.

Hong Kong, Shanghai, Singapore and Bangkok rose, but Sydney, Seoul, Wellington, Manila, Mumbai and Taipei dipped.

London, Frankfurt and Paris fell at the open.

Tokyo sank 1.9 percent as the yen strengthened on expectations the Bank of Japan will lift interest rates this month.

Governor Kazuo Ueda said it would “consider the pros and cons of raising the policy interest rate and make decisions as appropriate”, with Bloomberg saying traders saw a more than 60 percent chance of a move on December 19. That rose to 90 percent for a hike no later than January.

Masamichi Adachi, UBS Securities chief economist for Japan, wrote: “The BoJ is likely to hike its policy rate at the December 19 meeting. Recent remarks and reports… suggest groundwork for a rate hike is underway, with market probability exceeding 50 percent.”

But he said the yen would likely remain under pressure against the dollar, adding that Prime Minister Sanae Takaichi’s “preference for negative real rates may pressure (the) yen further”.

Oil prices surged around two percent after OPEC+ confirmed it would not hike output in the first three months of 2026, citing lower seasonal demand.

The decision comes amid uncertainty over the outlook for crude as traders look for indications of progress in Ukraine peace talks, which could lead to the return of Russian crude to markets.