Stocks rose slightly Friday on a government report that the unemployment rate rated eased to 10 percent in July from a record high of 17.7 percent in April, suggesting the economy may have stopped its descent in the third quarter.
The Philippine Stock Exchange Index added 12.23 points, or 0.2 percent, to 5,785.09 on a value turnover of P5.4 billion. Losers, however, beat gainers, 104 to 77, with 51 issues unchanged.
The Philippine Statistics Authority said Thursday there were 4.6 million unemployed Filipinos in July, up by 2.1 million from the same period last year but down by 2.7 million from three months ago.
“The decrease in the unemployment rate means that some 2.7 million jobs returned as the quarantine level eased. In addition, some 4.9 million workers rejoined the labor force. All in all, some 7.5 million jobs were restored,” acting NEDA Secretary Karl Kendrick Chua said.
Major property developer Ayala Land Inc. climbed 4.8 percent to P28.20, while BDO Unibank Inc., the biggest lender in terms of assets, advanced 1.9 percent to P87.80.
Bank of the Philippine Islands, the third-largest bank, however, fell 3.8 percent to P65, while Puregold Price Club Inc. of retail tycoon Lucio Co dropped 2.4 percent to P49.80
The rest of Asian markets fell deep into negative territory Friday following painfully deep losses on Wall Street, where the tech sector finally succumbed to profit-taking after months of mind-boggling gains.
All three main indexes in New York suffered hefty selling but the tech-heavy Nasdaq led the way with global titans such as Apple, Microsoft, Amazon and Facebook among the worst hit.
And the red ink flooded into Asia Friday, with tech firms again the whipping boys.
Tokyo, Hong Kong, Seoul, Singapore, Mumbai, Jakarta and Wellington all sank more than one percent, while Sydney dropped more than three percent. Shanghai and Taipei were both off 0.9 percent off.
The drop had been expected after the Nasdaq climbed around 80 percent from its March trough, with analysts warning that valuations were growing increasingly out of sync with economic realities—Tesla has risen nearly 500 percent in the time and Apple more than 120 percent.
The rally had been propelled by expectations for strong earnings growth next year following fiscal and monetary stimulus measures and as the world economy recovers from the virus crisis.
“Given the market’s seemingly relentless climb higher on the back of the mega-cap tech names, it should be no surprise that a pullback was in the offing as the market became increasingly extended and overbought,” Quincy Krosby, at Prudential Financial Inc, said.
This could be “an overbought market that is burning off froth, following end-of-the-month portfolio adjustments as managers needed to catch up.”
Observers said September has historically been a bad month for stocks and that while recent economic data had not been brilliant, it was not bad enough to spark such a sell-off.
And with central banks promising to back up financial markets for the foreseeable future, there are no expectations of a calamitous drop such as that seen in March or the tech bubble crisis two decades ago. With AFP
