The main composite index’s rise wavered on Friday, as profit-taking pulled the market from a strong advance Thursday.
Despite the rally in US and Asian markets, the Philippine Stock Exchange index (PSEi) slipped by 30.44 points, or 0.41 percent, to end the week at 7,428.30, while the broader all-shares index went down by 7.67 points, or 0.19 percent, to settle at 3,970.43.
Despite the decline, analysts said the index remained overbought following its recent climb.
The market ignored the positive sentiment overseas. US stocks rose overnight as traders awaited more clues about the health of US economy. Asian stocks also ended higher on Friday, spurred by China’s moves to boost its economy.
The market’s technical correction was manageable as overall sentiment remained positive. Indices ended mixed. Financials dropped 1.9 percent, while industrial slid by 0.03 percent.
Mining and oil advanced by 0.55 percent, followed by services which climbed 0.24 percent. Holding firms and property both rose by 0.02 percent.
Value turnover reached P6.59 billion, with 113 advancers, 94 decliners and 45 issues unchanged.
SM Prime Holdings Inc. rose the most among index stocks, rising by 1.52 percent to P33.35, while BDO Unibank Inc. declined 3.41 percent to P1.61.40.
Meanwhile, Hong Kong and Shanghai shares soared again Friday on hopes China will unveil more measures to boost its economy, while the yen rallied after Japan’s ruling party elected a new leader who backs interest rate hikes.
A string of announcements this week has seen leaders cut interest rates, pledge support to the beleaguered property sector, free up banks to lend more and pledge to boost jobs, particularly for the poor.
While analysts have warned that the measures — the boldest in years — will not on their own be enough to get the economy back on track, they have provided some much-needed cheer to investors and raised hopes that the government is listening to calls for major help.
They also come amid a more upbeat mood on trading floors after the Federal Reserve’s bumper rate cut last week and indications that more were in the pipeline through to 2026. The bank’s policy outlook will be in focus later Friday with the release of its preferred gauge of inflation.
On Friday, Chinese officials said they had cut the amount of cash banks must hold in reserve in a bid to get them lending more to revive economic activity — a move that would pump more than $140 billion into financial markets.
Meanwhile, a Bloomberg report said on Thursday that Beijing is considering pumping a similar amount into the country’s large state-run banks in the first such move of support since the global financial crisis.
“Beijing seems finally determined to roll out its bazooka stimulus in rapid succession,” said Nomura chief China economist Ting Lu.
“Beijing’s recognition of the severe situation of the economy and lack of success in a piecemeal approach should be valued by markets,” he said in a note.
Hong Kong soared more than three percent in opening trades before paring the gains, while Shanghai was up almost as much — both markets are now more than 10 percent from Friday’s close. The performance was Hong Kong’s best week since 2009 and the best in Shanghai since 2008, according to Bloomberg data.
Property stocks were again among the best performers in Hong Kong, with beaten-down developers enjoying some much-needed interest. Kaisa surged 77 percent, Fantasia rose more than 15 percent and Sino-Ocean added 11.1 percent.
Harry Murphy Cruise at Moody’s Analytics said: “The sustainability of these gains will depend on whether the new stimulus will be accompanied by broader structural reforms.
“Absent concrete policies to expand social safety nets, promote private business investment, and broaden the revenue base of local governments, the spending splurge risks being just a temporary sugar hit.
“Sure, it’ll help the economy achieve its growth target for the year; but creating a sustainable growth path is what investors want to see. To that end, we expect an acceleration of policy announcements over the remainder of the year.”
Tokyo rallied more than two percent on a falling yen, which hit 146.49 per dollar — its weakest since the start of September — on bets nationalist Sanae Takaichi would win the leadership of Japan’s ruling Liberal Democratic Party in a vote.
Takaichi has argued that hiking interest rates was a bad idea owing to the merits of a weaker yen.
However, the unit briefly strengthened to around 142.80 after the market close and the vote, which was won by former defense minister Shigeru Ishiba, who supports the Bank of Japan’s exit from its longstanding unorthodox monetary easing policies.
Crude edged down, extending Thursday’s losses sparked by expectations for a bump in output from Libya offset renewed hopes for China’s economy and worries about the crisis in the oil-rich Middle East.
Sydney also rose but Wellington, Taipei, Bangkok, Singapore, Seoul, Manila, Mumbai and Jakarta fell.
London, Paris and Frankfurt were also on the front foot.
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