Stocks fell for a second day, dragging the benchmark index to a nine-month low, on concerns the peso depreciation to 50 per US dollar will lift inflation rate and affect consumer spending.
The Philippine Stock Exchange index, the 30-company benchmark, plunged 176 points, or 2.5 percent, to close at 6,802.73 Tuesday, the lowest in nearly nine months since it finished at 6,729.53 on March 1. The bellwether was also down 2.1 percent since the start of the year.
The heavier index, representing all shares, also tumbled 84 points, or 2 percent, to settle at 4,138.16, on a value turnover of P7 billion. Losers outnumbered gainers, 131 to 63, while 37 issues were unchanged.
Five of the six sectoral indices posted losses, while only three of the 20 most active stocks ended in the green, led by restaurant chain operator Jollibee Foods Corp. which climbed 1.9 percent to P216 and miner Nickel Asia Corp. which rose 0.9 percent to P8.32. Alliance Global Group Inc., the holding company of tycoon Andrew Tan, gained 0.5 percent to P12.76.
Meanwhile, Asian markets rose Tuesday with energy stocks tracking a surge in oil prices, while Tokyo recovered an early sell-off caused by a huge earthquake off Japan’s northeast coast.
The 6.9 magnitude quake struck around dawn in the same region as the deadly 2011 tremor, sparking worries of another tragedy. But while it caused some tsunami waves they were not as high as five years ago.
The yen strengthened against the dollar after the quake as investors sought out safe haven assets but gave up most of the gains as it emerged there was no major damage.
The dollar fell to as low as 110.27 yen before bouncing back to sit at 110.70 yen, with expectations it will extend gains on bets for higher US interest rates under Donald Trump’s presidency.
Japan’s Nikkei rebounded to end the morning slightly up and at its highest mark since January.
Hopes that the OPEC oil cartel and Russia will be able to hammer out an agreement to cut production have lit a fire under crude prices and in turn energy stocks.
With OPEC’s twice-yearly gathering set for November 30, speculation is mounting that officials are close to a deal that would address a global supply glut.
“Market players are positioning themselves for higher prices, and oil will be in the $50 to $55 range if there is a deal,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich, told Bloomberg News.
“OPEC members are building a lot of expectations and taking too much exposure to let a deal fail.”
Both main contracts surged more than four percent on Monday and extended the gains in Asian trade, providing a springboard for regional energy firms.
Hong Kong-listed CNOOC and PetroChina jumped more than three percent apiece, while in Tokyo Inpex put on 1.8 percent and Woodside Petroleum advanced 2.3 percent in Sydney.
Hong Kong’s Hang Seng Index was up 1.2 percent and Shanghai gained 0.2 percent, while Sydney added 1.3 percent, Seoul 0.8 percent and Singapore 0.5 percent. Wellington and Taipei also rallied.
The uplift tracked a record close on Wall Street for all three main indexes thanks to the energy rally and expectations for a rate hike. With AFP, Bloomberg