Stocks fell for a fifth day, bucking the trend in regional markets, as the government reported a drop in tax collection in July and investors stayed on the sidelines amid expectations of a US interest rate hike before the end of the year.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 50 points, or 0.6 percent, to close at 7,794.93 Tuesday, following a holiday. Despite the loss, the bellwether was still up 12.1 percent since the start of the year.
The heavier index, representing all shares, also retreated 25 points, or 0.6 percent, to settle at 4,636.22 Tuesday, on a value turnover of P10.9 billion. Losers outnumbered gainers, 124 to 73, while 46 issues were unchanged.
Only four of the 20 most active stocks ended in the green, led by poultry producer Vitarich Corp. which gained 5.2 percent to P3.04 and food manufacturer Universal Robina Corp. which advanced 1.9 percent to P183.50.
Port operator International Container Terminal Services Inc. rose 0.7 percent to P85.05, while Manila Water Company Inc. added 0.2 percent to close at P26.80.
The Bureau of Treasury reported a budget deficit of P50 billion in July, the first month in office of the Duterte administration, as revenue collection fell 5 percent year-on-year.
Meanwhile, other Asian markets rebounded Tuesday from Monday’s sell-off, as investors returned to buying, buoyed by a rally on Wall Street with fresh data indicating improvement in the world’s top economy.
Bets on a rate rise this year have soared after Federal Reserve boss Janet Yellen said last week at the Jackson Hole symposium of central bankers that “the case for an increase in the federal funds rate has strengthened in recent months”.
Attention now turns to the release on Friday of the US jobs report, seen as a guide to whether the Fed will move sooner rather than later.
“Without question, jobs day is always a monthly highlight, but given the Federal Reserve board’s tilt at Jackson Hole, it plainly appears it will take a big surprise to derail a 2016 Fed hike expectation at this point,” Stephen Innes, senior trader at OANDA, said in a note.
“Investor odds of lift-off are hovering near 70 percent for December and Friday’s jobs data will offer more information about the probability of a hike in September than anything else.” With AFP, Bloomberg