Stocks retreated Wednesday from a two-day advance, on concern central banks in the US and Europe will reduce stimulus.
The Philippine Stock Exchange index, the 30-company benchmark, shed 79 points, or 1 percent, to close at 7,639.79. This reduced the total gains this year to 9.9 percent.
The broader all-share index also lost 38 points, or 0.9 percent, to settle at 4,531.66, on a value turnover of P6.5 billion.
Only three of the 20 most active stocks ended in the green, led by infrastructure conglomerate Metro Pacific Investments Corp. which rose 0.8 percent to P7.20 and developer Ayala Land Inc. which gained 0.6 percent to P39.75. Bank of the Philippine Islands added 0.1 percent to close at P105.40.
Meanwhile, most Asian markets also traded lower Wednesday. The MSCI Asia Pacific Excluding Japan Index fell 0.3 percent to 455.11 as of 4:10 p.m. in Hong Kong, led by losses in Indonesia and New Zealand.
Bonds, currencies and stocks were shaken Tuesday after Bloomberg News reported the European Central Bank was likely to gradually taper asset purchases as it ends quantitative easing, citing officials who asked not to be identified.
The odds the Federal Reserve will raise interest rates by December climbed to 61 percent on Tuesday, from about 50 percent a week earlier. The Topix added 0.6 percent on Wednesday after the yen fell the most against the dollar in more than a month.
“Equity markets are retreating following hawkish comments from Fed officials and talks the ECB may curb stimulus,” Margaret Yang, an analyst at CMC Markets in Singapore, said by phone. “There are uncertainties remaining. We will see a pick up in volatility ahead of the U.S. Elections.”
The dollar pushed on with this week’s rally against global currencies, including hitting another three-decade high against the beleaguered pound.
Investors were given a weak lead by their US counterparts after comments from two top Federal Reserve officials fanned speculation it will lift borrowing costs before the end of the year.
Talk of an increase returned after data last week showed US factory activity rebounded in September, while trading floors gear up ahead of a crucial jobs report Friday.
On Tuesday Cleveland Fed president Loretta Mester said she saw a strong case for a rate hike in November. They were followed by Richmond Fed head Jeffrey Lacker, who said a rise was needed to avert a surge in inflation that could lead to sharp rate hikes later.
“A December rate hike seems almost certain, and it sounds like that may be followed by two more rate hikes next year instead of one,” Chihiro Ohta, a Tokyo-based senior strategist at SMBC Nikko Securities, told Bloomberg News.
Bloomberg also cited unnamed European Central Bank officials on Tuesday as saying there was an “informal consensus” that it should gradually scale back its bond-buying programme in steps of 10 billion euros.
The news from Europe and the US comes as analysts warn the years of cheap cash are likely coming to an end, with the US economy picking up.
Talk of higher US rates has boosted the dollar this week and on Wednesday it toyed with 103 yen in the morning before dipping back to 102.90 yen, slightly up from its level in New York.
The greenback also stormed higher against higher-yielding Asia-Pacific currencies, including the Australian dollar, South Korean won, Indonesian rupiah and Malaysian ringgit. With AFP, Bloomberg