Stocks fell for a fourth day, bucking the gains in other Asian markets as President Rodrigo Duterte challenged foreign investors wary about his deadly drug war to “pack up and leave.”
The Philippine Stock Exchange index, the 30-company benchmark, lost 29 points, or 0.4 percent, to close at 7,580.22 Tuesday.
The broader all-share index also dropped 7 points, or 0.2 percent, to settle at 4,491.09, on a value turnover of P6.5 billion. Advancers outnumbered losers, 97 to 82, while 49 issues were unchanged.
Eight of the 20 most active stocks ended in the green, led by Bloomberry Resorts Corp. which advanced 4.3 percent to P6.10 and BDO Unibank Inc. which climbed 2.6 percent to P114.90.
Before leaving for Japan, Duterte said the economy would recover even if US investors worried over his campaign against illegal drugs would pack up and leave. The president flew to Japan, one of the top US allies in Asia, for a three-day visit that is partly aimed at building on two-way trade of more than $18 billion last year.
A group of business process outsourcing companies, which infuse more than $20 billion into the economy annually and employ more than a million Filipinos, wanted to seek clarification on Duterte’s recent remarks. American BPO companies account for over 80 percent of the industry in the Philippines.
Duterte is seeking stronger relations with Asian countries such as China and Japan. “With Japan as the Philippines’ top trading partner, I shall seek the sustainment and further enhancement of our important economic ties,” Duterte, 71, said in prepared remarks at Manila airport.
Meanwhile, Asian stocks climbed after US economic data bolstered the case for an interest rate increase this year as investors eye earnings across Japan, China and the U.S. The Topix index advanced as the yen weakened against the dollar.
“If we look at the health of the US economy, it just makes absolute sense to hike in December,” said James Woods, a strategist at Rivkin Securities in Sydney. While stocks may head higher, “it would not be a significant rally until we get the U.S. presidential election and rates out of the way,” he said.
A rally in Asian stocks has fizzled so far this month as investors pulled back from riskier bets before the US presidential election on Nov. 8.
US markets rallied Monday on the back of another upbeat round of corporate earnings and a provisional reading that showed activity in the US manufacturing sector expanded at a faster rate than expected.
That came as St. Louis Federal Reserve President James Bullard said December was “most likely” the best time for a tightening of borrowing costs. And Fed Bank of Chicago President Charles Evans said he saw three hikes by the end of next year.
“Bullard did not mince words and explicitly gave the green light for a December lift-off, but suggested that the longer term rate cycle is much lower,” Stephen Innes, a senior trader at Oanda, said in a note.
The Fed meets next month but is expected to stand pat as that comes just days before the presidential election. With AFP, Bloomberg