Market drops; Cemex, PLDT up
Stocks retreated Monday to end a two-day advance, following losses on Wall Street as investors took a step back to digest the US Federal Reserve’s latest pronouncement.
The Philippine Stock Exchange index, the 30-company benchmark, fell 28 points, or 0.4 percent, to close at 7,316.57, as five of the six sectoral indices ended in the red. Only holding firms posted gains.
The heavier index, representing all shares, also dropped 12 points, or 0.3 percent, to settle at 4,404.34, on a value turnover of P7 billion. Losers outnumbered gainers, 111 to 64, while 59 issues were unchanged.
Five of the 20 most actives stocks ended in the green, led by Cemex Holdings Philippines Inc. which climbed 3.3 percent to P7.75 and conglomerate GT Capital Holdings Inc. which rose 1.6 percent to P1,170. PLDT Inc. rose 1.2 percent to P1,530.
Meanwhile, most Asian markets also slipped Monday following last week’s broad advances, with the dollar suffering fresh selling pressure after the Federal Reserve hinted at a slower-than-expected pace of interest rate hikes this year.
With few events to drive buying, investors took a step back following a recent rally across global trading floors while there is a nagging fear that President Donald Trump’s promised tax cuts and spending splurge could come later than hoped.
“Positive catalysts to further moves higher appear to be lacking at the moment,” said Greg McKenna, chief market strategist at AxiTrader, in a note.
“The delay on the details of [Trump’s] tax plan is a risk for stocks if US data starts to disappoint,” McKenna said.
Wall Street provided a damp lead with the Dow and S&P 500 ending lower Friday.
In Asian trade, Hong Kong rose 0.7 percent to levels not seen since August 2015 and Shanghai edged up 0.4 percent but Sydney shed 0.4 percent, Seoul also gave back 0.4 percent and Singapore was 0.5 percent lower.
Wellington tumbled 1.4 percent, hit by a 10-percent dive in market giant Fletcher Building, which cut its profit forecast citing huge losses on a key construction project.
Japanese markets were closed for a public holiday.
In foreign exchanges, the dollar was down against most other currencies after the Fed on Wednesday lifted borrowing costs as expected but pointed to another two rises this year, confounding talk of a possible three or four.
The greenback retreated against the yen and euro as well as most other high-yielding currencies including the Australian dollar, South Korean won, Thai baht and Indonesia’s rupiah. With AFP, Bloomberg
“The less hawkish stance by the Fed has opened the door for local [emerging market] trade, even more so with the stronger-than-expected Chinese data last week, adding to the global dollar squeeze,” said Oanda senior trader Stephen Innes.
Adding to market unease were concerns about Trump’s plans for global trade after his Treasury Secretary Steven Mnuchin refused to renew past anti-protectionist pledges at a G20 gathering.
Commitments of support to the existing multilateral trade system, including the World Trade Organization, were also conspicuously missing from the final communique from the finance ministers’ gathering at the weekend.
The move follows Trump’s warnings to throw up levies and revise global agreements he says are unfair to the United States. With AFP, Bloomberg