Selling pressure dragged the local equities market to its fourth straight day of decline amid an ongoing investigation into corruption in the government’s flood control projects.
The benchmark Philippine Stock Exchange index dropped 1.13 percent, or 69.11 points, to close at 6,039.61, the lowest in more than five months. The broader all shares index went down 0.88 percent, or 32.35 points, to 3,649.94.
The peso slumped to 58.17 versus the U.S. dollar on Thursday from 57.461 on Wednesday.
All sectoral indexes closed in the red, led by mining and oil, which dropped 2.62 percent, while holding firms and property dropped 1.88 percent and 1.40 percent, respectively.
Analysts said investors are concerned that the ongoing investigation into corruption will prompt the government to cut infrastructure spending, which could slow the growth of the domestic economy.
“The market continued to decline today with pressure dominating and no green candles seen throughout the week,” said Luis Limlingan, head of sales at Regina Capital Development Corp.
The weakening of the peso against the dollar also contributed to investor sentiment.
“The market seems cautious, watching whether fundamentals can support stretched valuations,” Limlingan said.
Value turnover amounted to P5.74 billion. The market closed with 64 gainers versus 134 decliners, while 50 stocks closed unchanged.
Shares of DigiPlus Interactive Corp. managed to end higher, rising 2.9 percent to P24.80. The stock price of Century Pacific Food Inc. dropped 8.13 percent to P35.60.
Asian stocks skidded Thursday as traders continue to pull back from the buying that has propelled markets to record highs in recent months, with upcoming US inflation and jobs data seen as likely to be the next catalysts for action.
Investors have been on a buying spree since shares hit deep lows in the wake of Donald Trump’s April global tariff bombshell, with sentiment buoyed by trade agreements and signs that the Federal Reserve was about to resume its interest rate cut program.
The US central bank — citing a weak labour market and inflation that has not spiked — last week announced its reduction, and forecast there could be two more this year.
However, while traders have been banking on a period of easing, some Fed officials, including boss Jerome Powell, are trying to take a more cautious approach, citing still-elevated inflation.
His remarks this week that stocks are “fairly highly valued” and that there was “no risk-free path” on rates has tempered the euphoria on trading floors.
The bank will be keeping watch on the release this week of its preferred gauge of inflation — the personal consumption expenditure index — and next week’s non-farm payrolls report.
Tokyo held solidly in positive territory early Thursday, but most other markets trended lower.
Hong Kong dropped, with tech titan Alibaba in the red after Wednesday’s gain of more than nine percent in reaction to its chief executive saying it planned to ramp up spending on artificial intelligence. Its US-listed stock piled on more than eight percent.
And China’s biggest car exporter Cherry Automobile rocketed more than at the start of its 13 percent on its trading debut in the city, having raised about US$1.2 billion in its initial public offering. It ended up 3.8 percent.
There were losses in Singapore, Wellington, Taipei, Manila, Mumbai and Jakarta, while Sydney and Bangkok edged up with Shanghai and Seoul barely moved.
London, Paris and Frankfurt fell.
The tepid day came after a second day of losses in Wall Street for all three main indexes.
While there appears to be some unease in recent days over the latest market rally.
“With major regions in easy fiscal mode, and with the Fed cutting against a backdrop of broadening and accelerating profits, it’s not hard to argue for a boom in (earnings per share) and GDP growth,” Bank of America analysts wrote.
“US (capital expenditure) and revisions are broadening beyond tech, sticky inflation could help sales and thus drive operating leverage. This is the higher probability ‘tail’ in 2026 than stagflation or recession, in our view.”
And Pepperstone’s Michael Brown added that “the bull case has been a solid one for quite some time now, with the S&P having gone over 100 days without a daily loss of at least two percent, and remains firmly intact, with the underlying economy resilient and earnings growth robust”.
“Furthermore, the Fed’s ‘run it hot’ approach, resulting in a looser policy stance, sooner than expected, tilts risks to the outlook to the upside.” With AFP
