Local markets up on slower US GDP report

The Philippine Stock Exchange index (PSEi) gained 0.63 percent, or 44.70 points, to 7,109.03 points, which Regina Capital Managing Director Luis Limlingan pointed to “early window dressing.” (Pixabay photo)

MANILA – The Philippine financial market began the trading week on a positive note, an apparent windfall from the slow down of the US economy in the third quarter.

The Philippine Stock Exchange index (PSEi) gained 0.63 percent, or 44.70 points, to 7,109.03 points, which Regina Capital Managing Director Luis Limlingan pointed to “early window dressing.”

This, he said, “as investors questioned the growth sustainability of the largest economy” following the release of US gross domestic product (GDP) report for the third quarter at 3.5 percent from 4.2 percent in the previous quarter.

Limlingan said both the S&P 500 and Dow ended last week’s trading down “as doubts about whether equities can count on support from corporate earnings emerged in the wake of disappointing results from a handful of megacap companies.”

Amid these doubts, most of the counters in the local bourse ended the week’s first trading day with gains, with the broader All Shares up by 0.48 percent, or 20.80 points, to 4,353.39 points.

Financials led the sectors with a jump of 1.36 percent and was followed by Holding Firms, 0.69 percent; Services, 0.66 percent; Mining and Oil, 0.61 percent; and Industrial, 0.56 percent.

Only Property ended on the red after it lost 0.49 percent.

Volume reached 552.99 million shares amounting to PHP4.23 billion.

Gainers regained their footing and surpassed losers at 97 to 78 while 45 shares were unchanged.

Relatively, the peso improved against the greenback after finishing the day at 53.56 from 53.64 at the end of last week’s trading.

Landbank market economist Guain Angelo S. Dumalagan said the US growth slowed but “it came out better than expected.”

On the other hand, the US’ 2.3 percent inflation rate last September from 2.7 percent in the previous month came in below expectations.

Dumalagan told PNA that the slower inflation rate in the US tempered “hawkish views on US monetary policy”.

He explained that “a slowdown of the US economy is bad for global growth considering that the US is the world’s largest economy.”

“While this is true, the 3Q US GDP growth is not yet a cause of concern, as a 3.5 percent gain is still high relative to historical levels,” he pointed out.

For the day, the local currency opened at 53.57, way better than the 53.75 start in the previous session.

It strengthened a bit to 53.54 but also slipped to 53.635, bringing the day’s average to 53.599.

Volume reached USD645.25 million, lower that the previous session’s USD723 million.

The currency pair is seen to trade between 53.45 to 53.75 on Tuesday.