The stock market retreated Friday on profit taking after strong gains in the past sessions, with the banking sector spooked by reports that some local lenders had taken a hit on the financial problems of shipbuilder Hanjin Heavy Industries and Construction Company Philippines.
The Philippine Stock Exchange Index fell 81.14 points, or 1 percent, to 7,904.09 on a value turnover of P8.5 billion. Losers beat gainers, 125 to 79, with 37 issues unchanged.
Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, dropped 4.8 percent to P77.95, while Bank of the Philippine Islands also declined 4.8 percent to P90.
Reports on Friday said five universal and commercial banks—Rizal Commercial Banking Corp., Land Bank of the Philippines, Metrobank, BPI and BDO Unibank Inc.—seeking to cover some $412 million in combined loans to Hanjin were looking at “all kinds of alternatives,” including talking to strategic investors.
Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo downplayed any significant impact of the reported loan exposures of some banks to Hanjin to the banking sector. He said the banks’ exposures were “very negligible.”
Conglomerate Ayala Corp. lost 2.8 percent to P972, but Bloomberry Resorts Corp., which operates a casino on reclaimed part of Manila Bay, rose 5.5 percent to P10.68.
Meanwhile, the upbeat tone that has characterized this week helped Asian markets to fresh gains on Friday, with Hong Kong on course for a sixth straight day of rises.
Investors globally have been riding a wave of optimism since last week when the head of the Federal Reserve indicated it will likely slow its pace of interest rate hikes, while there were also signs that China and the US could eventually reach a trade deal.
And the gains were not limited to equities. Oil is up about 20 percent from 17-month lows at the end of December and high-yielding currencies were being supported by a new-found demand for riskier assets.
Hong Kong rose 0.4 percent in the afternoon, having climbed more than five percent since last Thursday’s close, while Shanghai ended up 0.7 percent and Tokyo added one percent.
Singapore and Seoul each rose 0.6 percent, Taipei jumped 0.4 percent while there were also gains in Wellington, Bangkok and Jakarta, though Sydney and Mumbai eased.
Friday’s rally followed another positive lead from Wall Street, where dealers brushed off disappointing retail figures as they focused on the prospect that borrowing costs will not rise as much as previously feared.
Fed minutes Wednesday showed policymakers are happy to hold off any more rate hikes as they assess the state of the economy, backing up dovish comments last week by its head Jerome Powell.
There was a slight wobble in New York after Powell on Thursday suggested the bank’s securities holdings should be “substantially smaller”—a sell-off by the Fed of such assets would lift interest rates.
But the general mood remained upbeat as a number of other top Fed officials indicated they were happy to see a break in hikes. With AFP