Stocks closed slightly lower as surprising uptick in the domestic unemployment rate and lingering geopolitical tensions sapped investor confidence ahead of the government economic growth report.

The Philippine Stock Exchange index (PSEi) shed 8.36 points, or 0.13 percent, to finish at 6,277.95 on Thursday, Aug. 6. Sectoral sub-indices ended evenly split between gainers and losers due to cautious trading environment across the local board.

Market activity remained moderate, with overall trading volume reaching 562 million shares valued at ₱6.17 billion. Market breadth was marginally positive, with advanceers topping decliners 97 to 96, while 57 issues closed unchanged.

Equities struggled for direction throughout the session as market participants adopted a wait-and-see stance prior to the release of the country's second-quarter gross domestic product figures. Institutional investors trimmed equity exposures to manage potential downside risks, choosing to hold cash until clearer macroeconomic indicators emerge.

“The local bourse ended lower as investors remained on the sidelines ahead of the release of the Philippines' second-quarter GDP [gross domestic product] print, with caution outweighing bargain-hunting activity,” said Luis Limlingan, managing director at Regina Capital Development Corp.

Sentiment was further weakened by fresh government labor statistics showing an increase in the nationwide jobless rate. The rise in unemployment stirred concerns over the underlying resilience of domestic consumer spending, a primary engine of the Philippine economy.

External geopolitical factors also added to the risk-averse mood. Japhet Tantiangco, research manager at Philstocks Financial Inc., noted that investors were bracing for domestic growth figures while simultaneously digesting global developments. 
“Lingering uncertainties between the US and Iran, as the latter denied that talks between the two were ongoing, also added to the pessimism,” Tantiangco said.

He added that late-session bargain hunting helped narrow the index's losses just before the closing bell.

Fiscal and sector-specific headwinds continue to hang over the broader economic outlook. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the PSEi came under pressure as forthcoming growth statistics could prove relatively soft.

He pointed to potential risks surrounding government underspending, particularly in infrastructure projects following disruptions in flood-control initiatives, alongside decelerating growth in agricultural output.

Investors are now turning their attention entirely to the official economic report, which will set the tone for monetary policy expectations and corporate earnings projections for the remainder of the year.