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Sunday, May 19, 2024

Philippine stock market ends three-day advance amid profit-taking

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Philippine stocks slipped amid profit-taking on Friday to end a three-day advance.

The 30-company Philippine Stock Exchange index retreated 8.92 points, or 0.13 percent, to close at 6,873.23, while the broader all-shares index went down by 3.88 points, or 0.11 percent, to settle at 3,597.67.

Philstocks Financial Inc. research analyst Claire Alviar said the market declined as investors cashed in on previous gains.

“The local market mostly traded in green territory amid positive developments in the local economy.,” Alviar said, before it closed lower.

Alviar said the Bangko Sentral ng Pilipinas’ move to reduce its risk-adjusted inflation forecast for 2024 to 3.9 percent, robust dollar remittances and approved foreign investment pledges in 2023 were among the positive developments for the economy.

Net value turnover reached P4.38 billion.

Meanwhile, Asian markets rose Friday, supported by Wall Street and eurozone records, as traders shrugged off weak US retail sales and recession in Britain and Japan.

US and European stocks rallied Thursday, with the broad-based S&P 500 up 0.6 percent to finish at an all-time high, along with Paris and Frankfurt.

London equities increased despite official data showing the UK entered recession at the end of last year, as high inflation prolonged a cost-of-living crisis.

Japan also entered recession in the back end of 2023, according to data released Thursday, with the Asian nation overtaken by Germany as the world’s third-biggest economy.

But overall Asian shares were headed for “their fourth consecutive weekly gain, potentially marking the longest winning streak in over a year unless they experience an unlikely decline” of more than 1 percent on Friday, said Stephen Innes of SPI Asset Management.

Despite the recession woes and US retail sales dipping more than expected in January, Innes said “the regional and global interest rate environment remains supportive for risk markets”.

The US Commerce Department reported a larger-than-expected decline in retail sales on Thursday, a 0.8-percent retreat after the winter holidays suggesting dampened consumer sentiment.

But Innes said “the broader dataset suggests a contrary narrative: if anything, the growth momentum in the US appears to have gained traction early in the year, building upon the strong performance witnessed in 2023”.

Figures released on Tuesday showing the US consumer price index slowed less than expected in January dealt a blow to hopes of an early interest rate cut by the Fed and had sent Asian indices mostly lower.

But investors returned to buying on expectations borrowing costs will be reduced later this year.

Friday’s producer price index “will be closely watched by markets and should drive the near-term direction for the equity and bond markets”, said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

Tokyo’s key Nikkei index ended at a new 34-year high, partly supported by the Wall Street rallies, including tech shares.

Sydney, Singapore, Seoul, Manila, Bangkok and Wellington were all up.

Jakarta stocks also gained Friday, as Indonesia’s election commission results showed Defence Minister Prabowo Subianto was on course to win the presidential election by a wide margin with more than half of the votes counted. With AFP

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