The stock market fell Monday, with investors digesting the monetary policy response of the Bangko Sentral ng Pilipinas last week.
The Philippine Stock Exchange Index dropped 54.74 points, or 0.8 percent, 7,222.08 on a value turnover of just P4.2 billion. Losers beat gainers, 101 to 75, with 53 issues unchanged.
The Bangko Sentral on Thursday raised the policy rate by another 50 basis points to 4.5 percent in a bid to temper the accelerating inflation that is still seen to peak in the third quarter.
The central bank said Friday the inflation rate in September likely rose to as high as 7.1 percent, driven mainly by higher prices of rice, fuel and some agricultural products as well as the weakening peso.
Universal Robina Corp., the biggest snack food maker, declined 3.5 percent to P139.50, while SM Investments Corp. of retail tycoon Henry Sy Sr. lost 2.6 percent to P880.
Security Bank Corp., the sixth-largest lender in terms of assets, fell 2.6 percent to P150, while Manila Electric Co., the biggest retailer of electricity, dropped 2.4 percent to P331.80.
Japanese shares, meanwhile, powered to a new 27-year high on Monday after the US and Canada clinched a long-awaited trade deal, but other Asian equity markets struggled in subdued holiday trading.
Tokyo’s leading Nikkei index closed at 24,245.76, finally crossing the record level it had flirted with on Friday, as traders shrugged off disappointing business confidence data and a weekend typhoon that shredded the country.
Also driven by a weaker yen against the dollar, this represented a gain of 0.52 percent and was the top performer in Asia, where markets in Hong Kong and China were closed.
Analysts warned, however, that traders could be looking to take some cash off the table following healthy gains in recent days.
“While the market maintained its strong momentum, it would be no surprise to see investors cash in on the recent gains at any time,” Hikaru Sato, senior technical analyst at Daiwa Securities, told AFP.
Elsewhere in the region, South Korea’s Kospi index was off 0.1 percent and Australian equities were lower by 0.6 percent in thin trade due to a public holiday.
Traders appeared broadly encouraged by news that the US and Canada had reached an agreement on a new free trade pact that will include Mexico, with the Canadian dollar jumping on news of the deal.
“Reaching a 27-year high is symbolic but still a stop on the road to further gains,” Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.
“The news about Nafta gave an extra boost to the market.”
In other markets, oil continued to climb amid fears that US-Iran tensions and instability in the Middle East could push prices towards the $100-per-barrel mark.
Both Brent Crude and the WTI index moved higher by around a quarter of one percentage point.
Foreign exchange markets were relatively calm, with a climb in the dollar’s value against the yen providing a boost to Japanese exporters. With AFP