Stocks fell Friday in cautious trading, with investors looking for new catalysts to boost the market amid surging oil prices.
The Philippine Stock Exchange Index eased 21.84 points, or 0.3 percent, to 7,672.28 on a value turnover of P4.2 billion. Losers beat gainers, 115 to 86, with 53 issues unchanged.
SM Investments Corp. of retail tycoon Henry Sy Sr. declined 2.6 percent to P881.50, while Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, power generation and hospitals, tumbled 3.9 percent to P4.90.
Megaworld Corp., the biggest lessor of office spaces, dropped 2.8 percent to P4.53, while speculative issue MRC Allied Inc. slumped 4.2 percent to P0.69
Meanwhile, Energy firms surged on the back of further gains in oil prices in Asian trade Friday while regional equity markets mostly rose as traders keep a cautious eye on high-level China-US trade talks.
The benchmark Brent crude contract broke the $80 mark Thursday for the first time in three-and-a-half years as a perfect storm of issues fuels concerns about supplies, with some forecasting it could break $100 at some point.
Brent and WTI are up about a third from their 2018 lows seen in February with upward pressure coming from Donald Trump’s decision to rip up the Iran nuclear deal, economic uncertainty in key producer Venezuela and an output cap by Opec and Russia.
That comes on top of continued improvement in the global economy and ongoing unrest across the Middle East.
Higher prices are boosting expectations for fatter profits for global energy giants and on Friday Hong Kong-listed PetroChina was among the big gainers, surging more than six percent, while CNOOC put on 3.4 percent.
Inpex climbed 2.8 percent in Tokyo while Santos jumped 0.8 percent in Sydney.
And Patrick Pouyanne, chief executive officer of French oil explorer Total SA, told Bloomberg News that if Trump imposes threatened sanctions on Iran “I wouldn’t be surprised to see $100 per barrel in the coming months.”
Asian dealers were broadly upbeat Friday. Hong Kong’s Hang Seng Index rose 0.3 percent and Shanghai ended up 1.2 percent. Tokyo closed 0.4 percent higher as exporters were lifted by a weaker yen, which is at a four-month low against the dollar.
Seoul added 0.5 percent and Wellington put on 0.6 percent but Sydney dipped 0.1 percent and Singapore shed 0.2 percent.
However, rising oil prices are increasing expectations of a jump in global inflation.
And the main focus is on the US, where the Federal Reserve is in the midst of an interest rate-raising cycle, with fears it could announce three more hikes this year.
Key US 10-year Treasury yields are already at seven-year highs above three percent and the prospect of paying more to borrow money has spooked investors, sending the dollar higher but causing a drag on stock markets.
Adding to the unease is the tariffs spat between the US and China, which has raised concerns about a trade war between the world’s two biggest economies.