PHL shares open weak on China data, US bond program

Philippine shares continued to decline at early trades Friday on fears of the US Federal Reserve scaling down its quantitative easing (QE) and China's weak factory output in May.

 

"We saw the stock market decline terribly yesterday. Today, it opened flat and went further down by 0.44 percent [at early trades]," Miguel Agarao, analyst at Wealth Securities Inc., told GMA News Online.

 

"This is a continuation of the correction yesterday due to the threat of tapering QE earlier than expected and the weak China manufacturing data. But this is a healthy correction," he added.

 

The main PSEi was sharply down 55.45 points or 0.76 percent to 7,258.93 as of 10:08 a.m.

 

On Wednesday, FED chairman Ben Bernanke said the bank could decide to minimize bond purchases at one of the "next few meetings" if the economic recovery looked set to maintain forward momentum.

 

US stocks slipped on Thursday but finished sharply off  session's lows as a rally in Hewlett-Packard's shares offset worries about weak Chinese manufacturing data and the prospects of the Federal Reserve reducing its monetary stimulus, Reuters reported.

 

The Dow Jones industrial average fell 12.67 points, or 0.08 percent, to 15,294.50 at the close. The Standard & Poor's 500 Index slipped 4.84 points, or 0.29 percent, to finish at 1,650.51. The Nasdaq Composite Index dropped 3.88 points, or 0.11 percent, to close at 3,459.42.

 

Meanwhile, China released on Thursday its manufacturing data which dropped for the first time in seven months to 49.6 percent in May from 50.4 percent in April. — VS, GMA News