Stocks fell for a third day, as traders remained on edge over Donald Trump’s plans for global trade agreements.
The Philippine Stock Exchange index, the 30-company benchmark, shed 14 points, or 0.2 percent, to close at 6,857.17 Tuesday, the lowest in more than eight months. This widened the bellwether’s losses this year to 1.4 percent.
The heavier index, representing all shares, also dropped 7 points, or 0.2 percent, to settle at 4,163.33, on a value turnover of P7.7 billion. Losers outnumbered gainers, 112 to 72, while 42 issues were unchanged.
Eleven of the 20 most active stocks ended in the green, led by DMCI Holdings Inc., the investment company of the Consunji family which climbed 6.4 percent to P13 and Nickel Asia Corp. which advanced 4.2 percent to P8.18.
Meanwhile, many trading floors in Asia have taken a hit recently over worries Trump will throw up tariffs to the world’s biggest economy.
His plans for huge spending and tax cuts at home have also fanned expectations the Federal Reserve will hike interest rates more sharply than initially planned, sending the dollar soaring and fuelling an exodus from emerging markets.
However, after a two-day retreat on most regional bourses, there was a tentative recovery with Jakarta 0.5 percent higher and Bangkok added 0.2 percent. There were also gains of 0.7 percent in Singapore and a 0.5 percent rise in Wellington while Hong Kong gained 0.2 percent in the afternoon.
However, Tokyo was marginally lower, having surged more than eight percent to a nine-month high since Thursday on the back of a rally in the dollar against the yen.
Shanghai was off 0.1 percent, while Sydney and Seoul each shed 0.4 percent.
“Risks are elevated, and we are expecting further increases in volatility as markets attempt to second-guess the policies that might eventually come out from the US,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told Bloomberg News.
The dollar dipped back from a five-month high of 108.54 yen, but traders suggested it could test the 110 yen mark as soon as this week, with eyes on Fed chief Janet Yellen’s congressional testimony later this week.
The central bank is widely expected to hike borrowing costs next month but her remarks Thursday will be pored over for clues about its plans for next year.
“By all accounts, there appears no stopping the US dollar’s recent ascent based on the current interest rate trajectory,” Stephen Innes, senior trader at OANDA, said in a note.
And Takuya Kanda, a senior researcher at Gaitame.com Research Institute said: “The dollar is currently rallying on expectations only. But the policies Trump has called for are all dollar-positive. After pausing around 107 to 108, the dollar will resume its uptrend toward 110 yen by year-end.”
The dollar sank against higher-yielding currencies, with the South Korean won, Australian dollar, Thai baht and New Zealand dollar all well up. The euro rose after hitting an 11-month low of $1.0709 Monday. With Bloomberg, AFP