PSEi drops 3.5% as investors bugged by negative growth of domestic, US GDP

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The benchmark Philippine Stock Exchange index (PSEi) ended the trading week lower by 3.5 percent as investors took their profits amid the 9.5-percent contraction of the country’s gross domestic product (GDP) in 2020 and the US economy turning in a -3.5-percent performance for the same year.

And with the contraction of US GDP, the head of the Federal Reserve warned of a long road to recovery for the world’s biggest economy.

“Local shares traded slightly negative as the final print of 2020 GDP (gross domestic product) showed a slower contraction. However, many opted to sell after the US Fed’s message did not sit well within investors,” Luis Limlingan, Regina Capital Development Corporation head of sales, said.

The Federal Open Market Committee (FOMC) also kept the Federal Reserve’s funds rates target range to between 0 to 0.25 percent, with monetary authorities saying the pace of economic recovery has “moderated in recent months.”

The benchmark Philippine Stock Exchange index (PSEi) shed 239.22 points or 3.49 percent to finish at 6,612.62 on Friday, while the all shares index slid by 101.01 points or 2.45 percent to close at 4,007.33.

 

Most of the sectoral gauges also finished the day in the negative territory, led by the Mining and Oil index, which declined by 2.17 percent.

 

It was trailed by Services, 1.43 percent; Industrial, 0.48 percent; and Financials, 0.39 percent.

 

On the other hand, both the Holding Firms and Property indexes rose by 0.09 percent.

 

Volume totaled 56.22 billion shares amounting to P8.8 billion.

 

Losers led gainers at 136 to 73, while 53 shares were unchanged.


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