Global economic slowdown depresses PHL stocks

The slowing global economy caught up with share prices on the Philippine Stock Exchange Tuesday, following days of a relief rally as the market hit oversold conditions last week.

The market is now going through a medium-term consolidation, "after what we've gone through over the last few days," but the selling pressure is coming from the economic situations in Japan, US and China, said Harry Liu, president of Summit Securities Inc.

The benchmark PSEi lost 58.91 points or 0.88 percent to 6,642.45 at the closing bell. The All Shares declined by 20.03 points or 0.52 percent at 3,805.82.

Liu noted the manufacturing outputs in the US and China all point to a slowing economy in the world's top and second largest economies.

"Then Japan adopted a negative interest rate policy... But this is something good in the long-term, because it is actually an economic stimulus. The Japanese government wants investors to take their money out of the banks and place it into more productive use," said Liu.

More than 603.679 million shares, valued at P6.294 billion, changed hands. Advancers led decliners, 84 to 79, while 34 issues traded unchanged.

"The rally in the past few days was a relief rally, as the valuations brought a lot of stocks at bargain levels," said Manny Cruz, market strategist at Asiasec Equities Inc.

"But the global concerns are testing the upside rally," Cruz noted.

"China, US, and oil prices have all dampened the market sentiment," he added.

Liu noted that "... oil prices are now seeking a support level to stabilize, but until the situation improves, including what's happening in Japan, China and the US..." there is going to be selling pressure in the short-term. – VS, GMA News