Stocks retreated Monday to end a three-day gain, on concerns over the weakening peso and expectations the US Federal Reserve will start raising interest rates in December.
The Philippine Stock Exchange index, the 30-company benchmark, tumbled 64 points, or 0.9 percent, to close at 6,825.40 Monday. This widened total losses this year to 1.8 percent.
The heavier index, representing all shares, also lost 29 points, or 0.7 percent, to settle at 4,146.92, on a value turnover of P5.8 billion. Losers outnumbered gainers, 111 to 74, while 37 issues were unchanged.
Seven of the 20 most active stocks ended in the green, led by DMCI Holdings Inc. which climbed 3.3 percent to P13.16 and PLDT Inc. which rose 2.1 percent to P1,352.
The peso rose 0.3 percent Monday to finish at 49.71 against the US dollar, still near an eight-year low as investors continued to hold on to the greenback in anticipation of the Fed rate hike next month.
Meanwhile, Hong Kong led a gain in most Asian markets Monday after officials announced the start of a long-awaited link-up with Shenzhen, but the dollar retreated against most of its peers after its recent surge.
Crude prices also saw fresh losses, after both main contracts slumped around four percent on Friday owing to disagreements over plans to cut output, with Iran and Iraq pressing to be excluded and Russia suggesting it will only freeze output.
Officials on Friday’s said the tie-up between the Hong Kong and Shenzhen markets would start on Dec. 5.
The scheme will give Hong Kong traders access to the mainland’s second stock exchange, the world’s eighth largest with a market capitalization of $3.3 trillion as of September.
The tie-up follows a similar “stock connect” between Shanghai and Hong Kong launched two years ago, which gave foreigners new access to Chinese companies not quoted elsewhere, and enabled mainlanders to trade in Hong Kong.
The city’s Hang Seng Index soared more than one percent in the afternoon, though Shenzhen slipped 0.1 percent by the close. Shanghai ended up 0.5 percent.
Most other regional stock markets were up, extending last week’s gains on bets Donald Trump’s spending plans will ramp up growth in the US economy.
Tokyo’s benchmark stock index closed lower on Monday, snapping a seven-day winning streak with exporters hit by a stronger yen and energy firms tumbling on lower oil prices.
The Organization of the Petroleum Exporting Countries will meet in Vienna on Wednesday, with hopes it will codify a broad agreement struck in Algeria in September to cut production and protect prices.
But crude rates tanked Friday on fears for the agreement as producers clash over its implementation, with Iran and Iraq pressing to be excluded and Russia suggesting it will only freeze output.
News that Saudi Arabia, the kingpin of the OPEC cartel, had walked out of talks on Monday — and suggested demand will pick up in 2017—has led to worries a settlement will not be reached before its twice-yearly meeting.
“Lately we’re often seeing cases where the oil market’s moves precede those in the equities market,” Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute, told Bloomberg News.
The Nikkei 225 closed down 0.13 percent, or 24.33 points, at 18,356.89, having ended at an 11-month high Friday.
“Since we’ve risen so far so quickly, whenever we see falls there are investors who want to buy,” said Tsutomu Yamada, an analyst at Kabu.com Securities Co.
But the broader Topix index of all first-section issues ended up 0.34 percent, or 5.05 points, at 1,469.58.
The dollar’s sharp rise took a breather with the greenback changing hands at 111.66 yen on Monday against 113.08 yen in New York — and well off the levels approaching 114 yen seen at the end of last week.
The dollar has risen in tandem with expectations that Donald Trump’s presidency will feature big government spending and tax cuts aimed at stoking growth in the world’s top economy.
Japanese exporters are sensitive to gains in the yen as a stronger currency tends to dent profits by making their products more expensive abroad while slashing the value of repatriated earnings.
Toyota fell 0.53 percent to 6,653 yen and Sony edged down 0.15 percent to 3,323 yen. With AFP, Bloomberg