Have we seen the bottom in Philippine stocks?

Three weeks ago, we wrote an article titled “Has the AI bubble burst?”

- WILSON SY

Three weeks ago, we wrote an article titled "Has the AI bubble burst?" We cited financial experts calling for a correction and warning that the powerful rally in US tech had stretched both valuations and sentiment. Indeed, the US markets finally pulled back. The Nasdaq 100 saw a peak-to-trough decline of nine percent, snapping a sevenmonth winning streak. The S&P 500 dropped by as much as five percent.

Nasdaq down, PSEi up

In contrast, the Philippine stock market has turned decisively higher. The PSE index closed at 6,022.24 last Friday, up by 7.8 percent from its five-year low of 5,584. After years of persistent underperformance, local equities may be carving out a durable floor just as the US market takes a breather.

AI leaders correct, breadth improves

The tech selloff proved healthy for global markets. It removed froth from the sector and allowed laggards to catch up. Nvidia Corp. tumbled as much as 20 percent, Meta Platforms Inc. dropped by 27 percent and Microsoft Corp. fell by 16 percent peak-to-trough. Market breadth improved beyond the megacaps. Previously neglected sectors like pharmaceuticals have surged. The small-cap Russell 2000 led the recovery, outpacing both the Nasdaq 100 and S&P 500.

Global rally broadens beyond US