Stocks retreated Tuesday, amid thin trading in Asian markets and as investors assessed the path for higher US borrowing costs.
The Philippine Stock Exchange index, the 30-company benchmark, fell 25 points, or 0.3 percent, to close at 7,860.77, as five of the six sectoral indices declined, with only services rising slightly.
The heavier index, representing all shares, also dropped 9 points, or 0.2 percent, to settle at 4,690.78, on a value turnover of P7.4 billion. Losers outnumbered gainers, 105 to 77, while 58 issues were unchanged.
Six of the 20 most active stocks ended in the green, led by Wilcon Depot Inc. which climbed 5.4 percent to P5.70 and oil refiner Petron Corp. which went up 2.6 percent to P11.26. Globe Telecom Inc. rose 2 percent to P2,102. Newly-listed Eagle Cement Corp. gained 1.7 percent to P15.56.
Meanwhile, most Asian markets fell in holiday-thinned trade, with dealers keeping tabs on a developing scandal around Donald Trump’s administration.
The Washington Post said Friday that Trump’s son-in-law and close advisor Jared Kushner had met the Russian ambassador prior to the inauguration and proposed a secret communications link to the Kremlin.
The talks, if confirmed, would raise new questions about the White House’s relationship with Moscow, which US intelligence agencies say could have helped the tycoon win November’s election.
There are fears the budding crisis, along with several other scandals enveloping the administration, could prevent Trump from pushing through his market-friendly economic policies.
Okasan Online Securities said in a commentary: “With President Trump returning home from a trip abroad, media reporting on ‘Russiagate’ will also pick up.”
Federal Reserve Bank of St. Louis chief James Bullard said Trump would have to start delivering on his promised agenda, which helped fan a surge in global markets in the months after the election.
“Washington does have to deliver at some point,” he told Bloomberg TV. “I think that is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of American politics would settle in.”
There were few catalysts to drive business, with Wall Street and London closed Monday for public holidays, while Hong Kong and Shanghai were closed Tuesday.
Tokyo ended flat, having pared early losses, Singapore shed 0.3 percent and Seoul gave up 0.5 percent, while Wellington was slightly lower. But Sydney closed up 0.3 percent.
The euro came under pressure following comments from the head of the European Central Bank suggesting it will stick to its loose monetary policy for now, disappointing those who had hoped for some form of tightening at its June meeting.
Mario Draghi said the ECB was “firmly convinced” it must maintain its interventions in the eurozone economy to avoid undermining a gathering recovery.
The bank’s interest rates are at historic lows, while the ECB buys tens of billions of euros in bonds each month to pump cash into the financial system.
Stephen Innes, senior trader at Oanda, said in a note: “The euro was trading a tad dark as Draghi’s latest comments suggest the EU still needs stimulus, sounding much less hawkish than the market lean.”
The pound was also struggling as Prime Minister Theresa May’s ruling Conservatives saw their opinion poll lead narrow further against the opposition Labour Party.
Sterling had soared in recent weeks on the prospect May would win a landslide in the June 8 poll, giving her a stronger hand in Brexit talks. But the currency has fallen with the government’s poll numbers on fears Britain could end up with a bad EU exit deal.
Attention will be on the release Friday of US jobs data, which will give investors a better handle on the Fed’s plans for raising interest rates, with its next policy meeting later this month. With Bloomberg, AFP
