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Market slips; Jollibee declines

The stock market fell slightly Friday in step with the rest of Asia, with local investors wary about rising inflation, the weak peso and the health of President Rodrigo Duterte.

The Philippine Stock Exchange Index slipped 15.14 points, or 0.2 percent, to 7,078.20 on a value turnover of P4.1 billion. Losers routed gainers, 129 to 66, with 40 issues unchanged.

The inflation rate in August further accelerated to a nine-year high of 6.7 percent from 6.4 percent a month ago, driven mainly by faster increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said on Friday.

President Duterte on Thursday admitted that he sought a second opinion at Cardinal Santos hospital on Wednesday after undergoing endoscopy and colonoscopy three weeks ago.

Presidential Spokesperson Harry Roque said earlier Thursday Duterte decided to take a “day-off” on Wednesday when he had been expected to grace a turnover ceremony involving Philippine Amusement and Gaming Corp.

Conglomerate JG Summit Holdings Inc. of industrialist John Gokongwei dropped 3.4 percent to P49.05, while Megawide Construction Corp. declined 2.6 percent to P14.02.

LT Group Inc. of airline and tobacco tycoon Lucio Tan retreated 2.6 percent to P14.34, while Jollibee Foods Corp., the biggest fast-food chain, fell 2 percent to P247.

The rest of Asian markets suffered further losses Thursday, hit by mounting fears about the path of US interest rate hikes and the increasingly fraught relations between China and the United States.

Stocks in Hong Kong, where monetary policy is linked to the Fed because of the city’s dollar peg, fell 0.2 percent Friday, having already lost more than four percent this week.

Tokyo ended 0.8 percent lower, Singapore shed 0.7 percent, Seoul was 0.3 percent off and Taipei sank 1.9 two percent.

New Zealand, Mumbai and Jakarta were also well down.

Tech firms were among the worst hit following a news report that said Beijing had used microchips as part of a drive to steal technology secrets.

Traders tracked a sell-off on Wall Street, where all three main indexes were hit by another increase in the 10-year US Treasury yield to a fresh seven-year high.

With Treasuries the key gauge for Federal Reserve policymakers when deciding interest rate hikes, markets are growing more concerned that the cost of borrowing will rise more than previously expected and in turn hit the economy.

This week also saw Fed chief Jerome Powell deliver a hawkish assessment of rates, which added fuel to the fire for many who are predicting a quick pace of hikes.

The prospect of borrowing costing more, slamming the door shut on a decade of ultra cheap cash, has sent investors running for the hills, with indebted emerging market economies in the spotlight as dollar-denominated repayments become harder.

“This week’s Fed speak does paint an exceedingly rosy picture of the US economy, the prospect of higher inflation and the Fed responding with even quicker and steeper rate hikes,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“Historically, faster-than-expected Fed rate hikes have posed a considerable negative for equity markets.” With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi , Jollibee
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