PSEi falls to over two-year low

THE stock market plunged below 6,000 on Friday and the peso also succumbed as investors digested the country’s below-target economic growth and worried over the pace of interest rate cuts.

The benchmark Philippine Stock Exchange index (PSEi) shed 245.07 points, or 4.01 percent, to close out the week at 5,862.59 — the lowest since Oct. 12, 2022’s 5,853.63.

The broader All Shares also fell, by 79 points or 2.19 percent, to 3,520.32.

The peso, meanwhile, weakened by eight and a half centavos to P58.365.

It opened trading at P58.43:$1 and ranged from P58.32 to P58.44. Volume reached P1.506 billion, up from Thursday’s P1.326 billion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso weakened a day after the government reported gross domestic product (GDP) growth of 5.6 percent for 2024, below the 6.0- to 6.5-percent target and just slightly higher than 2023’s 5.5 percent.

Philstocks Financial Inc. research manager Japhet Tantiangco also cited the “dismal 2024 GDP growth” and said that investors were “also concerned on how the BSP (Bangko Sentral ng Pilipinas) can help in fueling our country’s economic expansion given that the Fed (US Federal Reserve) is slowing down with its easing.”

Trading was strong with net value turnover at P20.61 billion and foreigners were net buyers with net inflows at P594.22 million, he added.

DragonFi Securities Inc. equity research analyst Franco Fernandez, meanwhile, said the PSEi had “entered a bear market, tumbling 22.9 percent from its October 7, 2024 [intraday] high of 7,604.61.”

“The sharp drop was driven by a PSEi rebalancing, which lowered the weightings of most index constituents to accommodate the inclusion of Areit and Chinabank,” he added.

Chinabank’s shares surged by P26.05, or 38.91 percent, to close at P93.00 apiece on Friday while shares of Areit rose by P3.00, or 7.69 percent, to P42.00 each. Both firms will join the benchmark bourse beginning Monday next week.

China Bank Capital Corp. Managing Director Juan Paolo Colet said “the market crashed into bear territory in the face of disappointing GDP results, a major index rebalancing, and Trump’s looming threat of massive tariffs on Canada, Mexico and China.”

“We are dangerously close to the market’s critical support at 5,700, but barring any negative surprises this weekend, we may see a relief rally by next week,” he added.

All sector indices but one closed in the red with mining and oil down the most by 6.57 percent. Financials were the sole gainer, up 1.05 percent.

On a company basis, decliners outnumbered gainers, 135 to 76, while 42 were unchanged.