Philippine shares settled back from sprightlier trade earlier in the day, with sentiment dampened by the International Monetary Fund (IMF)’s downward revision to its forecast for global economic growth.
The benchmark Philippine Stock Exchange index (PSEi) slipped 0.43 percent or 32.51 points to finish at 7,452.81, while the wider All Shares dropped 0.42 percent or 18.48 points to 4,366.13.
The IMF lowered its global economic growth forecast by 0.3 percentage points for 2015 and 2016 to 3.5 percent for this year and 3.7 percent for next year due to falling oil prices, the depreciating euro and yen, lingering crisis and limited growth potential for some countries.
The lender has also toned down its growth outlook for the five biggest economies in the Association of Southeast Asian Nations (Asean 5 consisting of Indonesia, Malaysia, the Philippines, Thailand and Vietnam) for the same period.
In the January 2015 edition of its World Economic Outlook (WEO), the IMF predicts economic growth in Asean 5 this year to settle at an average 5.2 percent, or 0.2 percentage points lower than its October 2014 projection of 5.4 percent.
For 2016, the growth forecast for the bloc is 5.3 percent, down 0.1 percentage point from the 5.4 percent previous forecast.
Mining, oil lead the slide
Mining and Oil led the fall in the sectoral indices, losing 2.91 percent or 492.31 points to 16,416.56.
Among the most actively traded stocks, Ayala Land Inc., BDO Unibank Inc. and GT Capital Holdings Inc. were the only gainers, while the others lost.
Total trade volume was 2.65 billion shares, valued at P9.58 billion
Decliners outnumbered advancers 106 to 78, while 41 issues closed unchanged.
Joyce Anne Ramos, analyst at AB Capital Securities Inc., said the market’s pullback had been expected given “the consecutive highs in the past few days.”
“Another factor is that the IMF cut its forecast for 2015 and 2016, which triggered profit-taking around noon (after) a slight increase in the morning,” she said.
The market found inadequate buying support even after the positive turnout in US and China trade on the back of “better-than-expected China GDP data.”
“In the coming days, the market is seen going into sideways trade with a downward bias after (today’s) weakness and is now having a hard time in its attempt to test the 7,500(-point) levels once again,” Ramos said.
Investors are likely to wait for full-year corporate earnings results around February, or March, before moving back to boost the market again toward 7,500 points and beyond, she said.
On Monday, the PSEi lost 0.07 percent or 5.56 points to close at 7,485.32, while the broader All Shares index gained 0.19 percent or 8.36 points to 4,384.61.