Philippine stocks extend losses on China worries

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The Philippine stock market continued to fall yesterday amid worries about the Chinese economy.

The benchmark Philippine Stock Exchange index (PSEi) closed 21.96 points or 0.34 percent lower at 6,528.80.

The sectoral gauges were mixed with property, services and holding firms ending in positive territory. Financials, mining and oil and industrial closed in the red.

Total value turnover was thin at P3.2 billion. Market breadth was negative, 106 to 71 while 52 issues were unchanged.

Luis Limlingan of Regina Capital said: 'The bears once again took over the area as the index tumbled by 21.96 points to 6,528.80 this session. The US market, on the flipside, edged higher as Wall Street digested more quarterly reports.'

He said recent rallies in the Philippine stock market have triggered profit-taking.

Meanwhile, shares were mostly lower Tuesday in Asia as optimism over a Wall Street rally was countered by worries about the Chinese economy.

In the United States, the economy has remained resilient, avoiding recession so far despite much higher interest rates meant to push down high inflation.

Also coming up this week will be the latest monthly update on sales at US retailers. Strong spending by US consumers has been one of the main reasons for the economy's resilience, driven by a remarkably sturdy job market.

The stock market's big run has critics warning that it is not a certainty the economy will avoid a recession, that inflation will continue to coast lower and that corporate profits will recover.

The wide expectation is for the Fed to raise rates at its meeting next week, which would take the federal funds rate to its highest level since 2001. But the hope among traders nevertheless is that will be the final hike of this cycle.

Easier interest rates help all kinds of stocks, but investors see big technology and other high-growth stocks as some of the biggest beneficiaries.