Philippine stocks plummet to 14-month low amid AI concerns, Fed meeting

The local stock market fell to a 14-month low as investors turned cautious and sold off shares ahead of the Chinese New Year holiday.

The main index dropped 43.41 points, or 0.70 percent, to close at 6,153.47. The services sector plunged, while the banks and industrials sectors managed to gain. Volume was steady at 1.51 billion shares worth P5.43 billion. Declining stocks outnumbered advancing ones 112 to 66, with 61 unchanged.

"Philippine shares were sold ahead of the CNY [Chinese new year] holiday, amid concerns of a potential artificial intelligence stock bubble bursting," said Luis Limlingan, managing director of Regina Capital Development Corporation.

This concern was triggered by reports of the Chinese startup DeepSeek developing a competitive AI model at a fraction of the cost incurred by Silicon Valley firms.

Adding to the uncertainty, the US Federal Reserve is scheduled to hold its first policy meeting of the year on Wednesday to decide on interest rates.

"Meanwhile, back home, the PSEi [Philippine Stock  Exchange index] closed in the 6,100 area as investors turned cautious ahead of the release of Philippine GDP data and the Federal Reserve’s policy decision," Limlingan added.

Philstocks Financial Research Manager Japhet Tantiangco said "The local market gave up more ground as investors maintained a cautious stance while waiting for catalysts. Investors are still looking forward to the Philippines’ 2024 GDP data as well as the Federal Reserve’s policy meeting."