Stocks fall in weak session ahead of GDP data
STOCKS opened the week on a weak note, extending Friday’s losses as investors opted to stay on the sidelines ahead of Thursday’s release of first quarter economic data.
“The market is basically still in the course of consolidating heading toward lower support side. There’s no change in the long term trend so far, and on just short term, some investors pocketed recent gains for the two IPOs (initial public offerings) which will eat up few billions from the market,” Summit Securities, Inc. President Harry G. Liu said via phone yesterday.
The two upcoming IPOs which were “both attractive to the market,” are Eagle Cement Corp. and Cebu Landmasters, Inc., Mr. Liu said.
Investors are also eyeing talks in China “if it will effect any global development,” he added. “After that, I don’t see any crisis, so what I see is just a market continuing to be soft and moving sideways as investors await more economic data for direction. Locally, the Q1 GDP (Gross Domestic Product) is also being looked upon whether it will really stay stable.”
AB Capital Senior Research Analyst Lexter L . Azurin meanwhile said: “Today the market drop is primarily from profit-taking since we’ve been rallying for the past few weeks, some took advantage taking gains and I guess in general the sentiment is staying on sidelines as investors await GDP results this week.”
Most sectoral indices ended in negative territory yesterday, except with holding firms which posted gains of 30.05 points or 0.38% to close at 7,930.85.
Three stocks fell for every two that gained, while 50 stocks were unchanged. Foreign investors were also net buyers in the stock market. They bought shares worth P3.48 billion and sold P3.37 billion, resulting in a net inflow of P109.05 million. Investors traded 1.39 billion issues on Monday valued at P7.48 billion.
Justino B. Calaycay, Jr., senior research analyst at Philstocks Financial, Inc., said this week’s “inflection point” may come on Thursday when the government releases the official first quarter GDP numbers.
“The NEDA (National Economic and Development Authority) is confident of achieving 7%, against our forecast of between 6.3% and 6.5%, even as we agree with the agency that the boost comes from the significantly improved trade as well as sustained consumer demand and the revving up of government spending,” Mr. Calaycay said in a report.
A BusinessWorld survey of 13 economists and analysts late last week yielded a 6.8% first-quarter growth estimate median.