Stocks sank Monday, as investors fled from emerging markets ahead of a widely expected rate hike by the US Federal Reserve this week and as oil prices climbed.
The Philippine Stock Exchange index, the 30-company benchmark, dipped 174 points, or 2.5 percent, to close at 6,868.80. This pulled down the bellwether to the negative territory, with 1.2-percent loss since the start of the year.
The heavier index, representing all shares, also dropped 67 points, or 1.6 percent, to settle at 4,162.39, on a value turnover of P6.3 billion.
Only three of the 20 most active stocks ended in the green, led by Apollo Global Capital Inc. which climbed 13.6 percent to P0.05. Petron Corp. rose 5.3 percent to P10.30, while Pilipinas Shell Petroleum Corp. gained 0.4 percent to P68.05.
Ayala Land Inc. was among the biggest losers, as it dropped 5.6 percent to P33. Universal Robina Corp. shed 5 percent to P163.
Meanwhile, Chinese stocks slumped the most in six months as a worsening concern about the outlook for the property market and curbs on insurers’ equity investments spurred selling.
The Shanghai Composite Index fell 2.1 percent to 3,164.82 as of 2:20 p.m. local time, headed for its biggest loss since June 13.
A measure of property companies tumbled 3.6 percent after China Vanke Co.’s president predicted home sales will drop “significantly” in the coming year.
Energy firms in Asia surged with rocketing oil prices after 11 non-Opec countries agreed to huge cuts in crude production, while Saudi Arabia also signalled a bigger reduction in output than previously agreed.
The 11 nations, led by Russia, said they would pump more than half a million fewer barrels a day from next month in an effort to address a global supply glut that has scythed prices over the past two years.
The cut will contribute to the Organization of the Petroleum Exporting Countries’ own initiative unveiled with Russia on Nov. 30.
Also at the weekend Opec kingpin Saudi Arabia said it will slash production beyond what was previously agreed by Opec last month, providing an additional boost for prices.
“This is a very powerful message that producers want to balance the market higher,” said Chris Weston, chief market strategist in Melbourne at IG, told Bloomberg News. “As a statement of intent, this is about as bullish as it gets.”
Both main contracts surged almost five percent in early Asian trade Monday, setting a fire under energy firms in the region.
Hong Kong-listed CNOOC added 1.5 percent and PetroChina gained 1.7 percent while in Sydney Woodside Petroleum was up 2.7 percent and Japan Petroleum jumped 6.8 percent in Tokyo.
However, the gains were unable to spark a broad rally across regional markets.
Tokyo was up 0.7 percent by the break but Hong Kong lost 0.3 percent and Shanghai shed 0.7 percent. Sydney, Seoul and Singapore were flat.
On currency exchanges the dollar rallied ahead of an expected US interest rate hike this week by the Federal Reserve.
In early trade the dollar bought 115.40 yen compared with 115.29 yen in New York and well up from the 114.40 yen earlier Friday in Asia.
The greenback has surged in the past month on expectations of higher borrowing costs, with President-elect Donald Trump’s promises of big spending and tax cuts fanning talk of a surge in inflation. With AFP, Bloomberg
