Philippine stocks closed flat at the beginning of this week’s trading as investors started to take profit after last week’s rally.
The 30-company Philippine Stock Exchange index lost 2.94 points, or 0.05 percent, to close at 6,475.50, while the broader all-shares inched up by 6.59 points, or 0.19 percent, to settle at 3,416.14.
“The index closed slightly lower as selling pressure emerged in the 6,500 area,” China Bank Capital managing director Juan Paolo Colet said.
“In terms of technicals, the market is nearly overbought after last week’s rally, so some traders have started to take profits,” he said.
Value turnover reached P4.9 billion, while foreign investors posted a net inflow of P625.33 million.
Asian stock markets also fell Monday as traders took a step back following last week’s rally, with Federal Reserve officials looking to temper expectations the US central bank will cut interest rates several times next year.
Investors are also keeping tabs on the Bank of Japan’s meeting this week, though recent speculation that it will shift away from its ultra-loose monetary policy has faded, with observers tipping a move in the new year.
Equities look set to end the year on a high after the Fed suggested it will begin loosening monetary policy after a string of data showed inflation coming down and the economy on course for a soft landing.
The Dow and Nasdaq hit record highs on Wall Street as tech firms surged, but the buying frenzy slowed Friday as investors took a step back, which analysts said was to be expected after the latest advances.
Asia struggled at the start of this week, with Hong Kong down one percent, while Tokyo, Shanghai, Sydney, Singapore, Mumbai, Taipei, Manila and Jakarta were also in the red.
London, Paris and Frankfurt opened lower.
Wellington, Bangkok and Singapore eked out small gains, however.
A number of Fed officials lined up last week to douse expectations they will slash rates next year. Some observers have predicted as many as six cuts, but the bank’s “dot plot” forecast saw three.
New York Fed chief John Williams told CNBC that “we aren’t really talking about rate cuts”, adding it was “just premature to be even thinking about” a March cut, which some experts have suggested.
“If we get the progress I’m hoping to see… of course it would be kind of natural… (to) move monetary policy over a period of years back to more normal levels”.
Atlanta Fed boss Raphael Bostic said he foresaw two reductions from the third quarter, while his Chicago counterpart Austan Goolsbee warned that policymakers would be unlikely to move until they were convinced inflation was brought to heel.
The Bank of Japan’s own decision is due Tuesday, and while there has been talk that it is about to shift away from years of ultra-loose policy, analysts do not expect it to do so for a few months.
Officials have kept rates in negative territory and stuck to a policy of controlling bond prices in a bid to boost the economy, but with inflation rising and the yen struggling, they are now said to be shifting.
“The BoJ has little need to rush into making policy changes,” said economists at Societe Generale.
“But markets will be watching for any sign the board is willing to end negative rates or yield curve control.” With AFP