Stock mart extends losses; Medco rises
Stocks dropped for a seventh day, as commodity shares fell after a selloff in US energy companies and investors awaited a report on US employment.
The Philippine Stock Exchange index, the 30-company benchmark, lost 14 points, or 0.2 percent, to close at 7,773.31 Thursday.
The broader all-share index also declined 18 points, or 0.4 percent, to settle at 4,615.35, on a value turnover of P9.7 billion. Losers outnumbered gainers, 121 to 82, while 41 issues were unchanged.
Seven of the 20 most active stocks ended in the green, led by Medco Holdings Inc., which surged 49.4 percent to P1.21, on reports Tiger Resort, Leisure & Entertainment Inc., the group led by Japanese billionaire Kazuo Okada, will use Medco for its backdoor listing.
Metropolitan Bank & Trust Co., the second-largest bank, climbed 4.7 percent to P87.40, while property developer Megaworld Corp. rose 2.8 percent to P4.84.
Meanwhile, Asian markets swung Thursday morning after a surprise pick-up in Chinese factory activity that indicated stability in the world’s number two economy but fuelled fears authorities will hold off fresh stimulus.
Trading was cagey across the region following oil-linked losses in New York and ahead of Friday’s closely watched US jobs report that could precipitate another Federal Reserve interest rate hike.
Beijing said its purchasing managers index of manufacturing activity hit 50.4 last month, its highest level since October 2014 and suggesting the economy is stabilising following a series of policy tweaks aimed at kick-starting growth.
The reading was sharply up from July’s 49.9 and confounded expectations for a drop to 49.8 in a survey for Bloomberg News. Anything above 50 marks growth and a figure below points to contraction.
Analysts said recent weak PMI data had been skewed by severe floods in China that had hit key manufacturing areas.
“Underlying demand continues to stabilise, suggesting that the expansionary fiscal policy stance adopted since early this year is still supporting growth,” Julia Wang, an economist with HSBC in Hong Kong, told Bloomberg News.
China’s economy is growing at its slowest rate for a quarter of a century.
But Zhu Qibing, chief macro economy analyst at BOCI International (China) in Beijing said the “People’s Bank of China will refrain from more easing, but won’t tighten immediately”.
Hong Kong was up 0.7 percent in the afternoon but Shanghai ended 0.7 percent down with both markets witnessing volatility.
Tokyo rose 0.1 percent by the break, with a weaker yen keeping the Nikkei just above water. But Sydney fell 0.3 percent and Seoul was off 0.4 percent while Wellington, Taipei and Manila also sank.
The yen has softened against the dollar this week after Fed boss Janet Yellen—and later her vice chair Stanley Fischer—indicated rates could rise this year as the US economy improves.
The dollar bought 103.33 yen in Asia Thursday, down from 103.43 yen in New York but well up from the levels below 100 yen seen last week before Yellen’s speech.
Focus is now on Friday’s non-farm payrolls figures, which will be pored over for clues about the Fed’s next move. A private report by payrolls firm ADP said US businesses added a solid 177,000 new staff in July.
Analysts said that data supports the consensus forecast for a solid gain on Friday.
“As long as tomorrow’s jobs report isn’t dreadful, I would expect the hawkish rhetoric to pick up further in the coming weeks and markets to price in a hike more, which would likely mean a stronger dollar,” Craig Erlam, senior market analyst at OANDA, said in a note. With AFP, Bloomberg