Stocks fell Friday, bringing the benchmark index to a six-week low, as investors stayed on the sidelines while a strong typhoon closed in on the northeastern part of Luzon.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 104 points, or 1.4 percent, to close at 7,413.15 Friday.
The heavier index, representing all shares, also retreated 47 points, or 1 percent, to settle at 4,555.30, on a value turnover of P6 billion. Losers outnumbered gainers, 115 to 67, while 46 issues were unchanged.
Only two of the 20 most active stocks ended in the green, including Metro Pacific Investment Corp. which rose 1 percent to P5.28 and Pilipinas Shell Petroleum Corp. which gained 0.6 percent to P53.20.
Meanwhile, Asian markets extended their gains Friday on hopes for China-US trade talks, while Turkey’s lira held up after a shock hike in the country’s interest rate and a dip in US inflation.
After a tumultuous start to the month, investors finally had something to smile about Thursday after Treasury Secretary Steven Mnuchin invited Chinese officials for fresh talks to avert an all-out trade war.
The news provided some much-needed support, which was improved on later in the day with data showing US consumer price inflation slid in August, easing pressure on the Federal Reserve to tighten borrowing costs.
While the central bank is expected to lift rates next month, the figures lower the chances of another such move before January and provided a boost to equities on Wall Street.
It also gave some breathing space to emerging markets, which have been battered in recent weeks by fears of contagion from crises in Turkey, Argentina and South Africa as a stronger dollar makes it harder for them to repay debts.
“Hope springs eternal for emerging markets anytime the US dollar weakens and (Thursday) was no exception,” said Stephen Innes, head of Asia-Pacific trading at Oanda.
“As indeed the stars aligned for emerging markets assets after an astonishing interest rate hike from the Central Bank of Turkey... and an exceedingly soft US [inflation] data,” he said.
The CBT ramped up interest rates to 24 percent from 17.5 percent Thursday as it struggles to fight off inflation and boost the lira, which is down around 40 percent this year.
The surprise move—an indication the CBT wanted to show its independence from strongman President Recep Tayyip Erdogan—sent the lira surging to 6.01 to the dollar from 6.4 and the currency managed to hold its gains in Asian trade.
Other high-yielding currencies also rallied with India’s rupee well off recent record lows and the Indonesian rupiah up after touching a 20-year trough. Mexico’s peso and the South African rand were more than one percent higher, while the South Korean won added 0.5 percent and Australian dollar gained 0.3 percent.
The positive sentiment from Thursday continued into the weekend on equity markets, with Tokyo ending 1.2 percent higher and Sydney 0.6 percent up.
Hong Kong rose 1.1 percent in the afternoon, adding to the previous day’s 2.5 percent rise, while Seoul surged 1.4 percent and Singapore gained 0.9 percent. Wellington, Taipei, Bangkok, and Jakarta also enjoyed healthy advances.
While traders are upbeat, Hannah Anderson, global market strategist at JP Morgan Asset Management, warned against being too hopeful, with the US still considering imposing tariffs on $200 billion of Chinese imports.
“Markets need to separate trade rhetoric and trade actions,” she said. With AFP