Market retreats; ICTSI up
Stocks retreated Wednesday to end a two-day advance, as most Asian markets followed US equities lower before an expected interest-rate hike by Federal Reserve policy makers.
The Philippine Stock Exchange index, the 30-company benchmark, fell 7 points, or 0.1 percent, to close at 7,253.79, as four of the six sectoral indices ended in the red. Only financials and services moved up.
The heavier index, representing all shares, lost 9 points, or 0.2 percent, to settle at 4,373.82, on a value turnover of P8.3 billion. Losers outnumbered gainers, 133 to 59, while 52 issues were unchanged.
Seven of the 20 most active stocks advanced, led by port operator International Container Terminal Services Inc. which climbed 2.9 percent to P81.50 and oil refiner Petron Corp. which rose 1.2 percent to P8.80.
Meanwhile, most stock markets retreated in Asian trade Wednesday following losses on Wall Street and in Europe as nervous investors await the end of the Federal Reserve’s policy meeting, while oil prices bounced back from the previous day’s sharp losses.
The US central bank is all but certain to announce an interest rate hike later in the day but traders are mostly interested in what its plans are for future increases, with Fed boss Janet Yellen’s news conference in focus.
However, with a slew of strong US data in recent months having already been baked into prices, a global market has eased up in March, dented by concerns about Donald Trump’s lack of movement on his promises to ramp up infrastructure spending and cut taxes.
Tokyo closed down 0.2 percent with the dollar unable to break above the 115 yen level breached briefly last week, while Toshiba plunged more than 12 percent with fears growing about its future as it struggles to deal with massive losses and accounting fraud allegations at its US nuclear unit.
Hong Kong gave up 0.1 percent in the afternoon and Singapore was 0.3 percent off while Seoul was marginally lower. Taipei, Wellington and Manila were down but Sydney ended up 0.3 percent and Shanghai put on 0.1 percent.
“It’s all about the US Fed this week and the market is convinced we will see a rate hike,” said Greg McKenna, chief market strategist at AxiTrader in a note.
“And it will be the language Janet Yellen uses in the statement, the dot-plot of expected moves in the next year and Yellen’s press conference which will be the big movers. My sense is that the Fed will signal at least another two hikes this year and another three to four in 2018.”
Energy firms fell despite a rebound in oil prices from Tuesday’s sharp losses.
Both crude contracts lost more than one percent after data emerged showing key producer Saudi Arabia increased production last month, raising questions about the OPEC cartel’s reduction commitment, just as US shale output expands.
However, prices recovered on news from a private firm showing US stockpiles had seen a surprise drop last week, compared with forecasts for a big increase. Brent was up 1.6 percent in Asia Wednesday while West Texas Intermediate gained 1.4 percent.
On currency markets the pound edged up after hitting an eight-week low in New York as Britain prepares to trigger its exit from the European Union. The euro was edged up but is struggling as investors nervously await a general election in the Netherlands, with a far-right, anti-EU party in second place. With AFP, Bloomberg