The local stock market sank further Tuesday, even as U.S. stocks rallied, as an ongoing investigation into massive corruption in government flood-control projects weighed on overall investor confidence.
The 30-company Philippine Stock Exchange index shed 96.29 points, or 1.55 percent, to close at 6,118.54. The broader all-shares index dropped 35.62 points, or 0.95 percent, to 3,693.67.
The peso closed lower against the U.S. dollar Tuesday at 57.295, compared with 57.056 on Monday.
“Prices declined further as investors grew more cautious about the ongoing issues facing the country, which weighed on overall market confidence,” said Luis Limlingan, head of sales for Regina Capital Development Corp.
Limlingan said bearish sentiment prevailed among participants despite potential rate cuts and a stable inflation rate.
On the other hand, US stocks extended their gains ahead of the release of key US inflation data later in the week.
Except for the mining and oil index, which gained 3.68 percent, all sectors ended in the red. The decline was led by financials, which dropped 2.42 percent, followed by services and conglomerates, which went down by 1.48 percent and 1.46 percent, respectively.
Value turnover improved to P6.1 billion. Decliners edged out gainers 129 to 78, while 56 stocks ended unchanged.
Shares of Aboitiz Power Corp. rose 1.63 percent to P43.80, while shares of Ayala Corp. declined 3.47 percent to P500.
Asian markets struggled Tuesday to track another record day on Wall Street, with traders now awaiting the release of US inflation data that could dictate Federal Reserve policy in coming weeks.
The tepid performance came after a hot couple of weeks on trading floors fueled by optimism over an easing of US monetary policy. With AFP
Last week’s interest rate cut came with Fed forecasts for two more before the end of the year as officials aim to shore up the stuttering labour market despite elevated inflation.
That puts in focus Friday’s report on personal consumption expenditures, the Fed’s preferred measure of inflation.
With trade subdued by a holiday in Japan and an approaching typhoon in Hong Kong, Asian markets drifted.
Hong Kong and Shanghai slipped with Manila, Bangkok and Wellington, while Sydney, Seoul, Singapore and Jakarta rose.
Paris and Frankfurt started with gains as data showed eurozone business activity growth hit a 16-month high in September.
Taipei jumped more than one percent with chip titan TSMC soaring more than three percent as it tracked US counterpart Nvidia, which announced a $100 billion investment in OpenAI for next-generation artificial intelligence.
However, there are growing worries that the surge may have gone too far and markets are due a pull-back with eyes on a possible government shutdown in Washington.
Senators failed to pass a stopgap funding bill Friday after the Republican-controlled House of Representatives narrowly passed it.
The bill was shot down by Democrats and with both chambers scheduled to be in recess next week, time is running out to keep the government running after the end of the fiscal year September 30.
A shutdown would see non-essential operations start to grind to a halt and hundreds of thousands of civil servants temporarily left without pay.
“There are rickety bridges ahead. The US government shutdown drama remains unresolved—another potential rockslide on the tracks,” said SPI Asset Management’s Stephen Innes.
“The Senate’s failure to bridge the gap between competing proposals leaves traders watching the Sept. 30 deadline with one eye, even as the other scans record-high tickers.
“Markets rarely derail on the first warning, but complacency can turn into chaos when the train rounds a blind corner.” With AFP
