Philippine stocks slipped for seventh straight trading day on lack of fresh leads and continued depreciation of the peso against the dollar.
The peso closed at 58.78 against the greenback Thursday, down from 58.76 Wednesday.
The bellwether Philippine Stock Exchange index closed at 6,344.56 Thursday, down 21.47 points, or 0.34 percent, from the previous trading day, while the wider all-shares index rose 1.85, or 0.05 percent, to settle at 3,440.31.
“Investors are seeking clear direction on interest rates amid mixed signals, making them wait for the next policy meeting despite expectations that the Bangko Sentral ng Pilipinas won’t cut rates,” Philstocks Financial Inc. research analyst Claire Alviar said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the market continued to drop as the US dollar/peso exchange rate remain at high levels, while global crude prices rose on increased tension between the Philippines and China.
Foreign investors remained net sellers, recording a net outflow of P552.2 million. Value turnover was thin at P3.86 billion.
Four of the six sectoral indices ended in the negative territory. Financials dropped 0.69 percent, while services, property and industrial went down by 0.68 percent, 0.49 percent and 0.31 percent, respectively.
Mining and oil jumped 1.61 percent, while holding firms rose 0.38 percent.
Meanwhile, Asian markets were mixed Thursday as investors tried to gauge the outlook for US interest rates, while also keeping tabs on developments in France as it heads for crucial elections.
With Wall Street closed, there were few catalysts to drive buying, though sentiment has been buoyed this week by recent data indicating the world’s top economy is slowing gradually, giving the Federal Reserve some freedom to ease monetary policy.
Traders are closely following the utterances of US central bank officials on their outlook for rates, with most warning that while inflation was on a downward trajectory, they wanted to see more evidence before committing to a cut.
Analysts say this means there will be two reductions at most, with many predicting just one this year — in line with the Fed’s “dot plot” gauge released last week.
While there is a level of uncertainty over rates, equity markets have enjoyed plenty of support, with dealers optimistic that borrowing costs will come down eventually as prices are brought under control, the economy eases and the jobs market loosens.
However, there is some concern that the rally, which has been largely driven by a voracious appetite for tech and all things related to artificial intelligence, could see a correction at some point.
Chris Weston at Pepperstone Group in Melbourne said there is some talk about what could cause this, warning that “all is not so rosy under the hood, where index market breadth has been poor, with participation underwhelming, suggesting the rally has been built on a shaky foundation”.
“It has simply been a tough trade to bet against AI in its various guises — so until we lose these behemoths then pullbacks at an index level will likely be shallow and well-supported.”
Shares in Tokyo, Seoul, Wellington, Taipei, Mumbai and Jakarta edged up but Hong Kong, Shanghai, Sydney, Bangkok, Manila and Singapore were in the red.
London and Frankfurt rose in the morning.
Paris was also up as traders eyed developments in France ahead of polls at the end of the month, with President Emmanuel Macron’s centrist alliance in third place behind far right and left parties.
There are fears for the French economy — the European Union’s second biggest — as both leading parties have pledged to spend huge sums at a time when the country needs to make cuts, potentially putting Paris on course for a standoff with the bloc.
On Wednesday, the European Union’s executive arm reprimanded France for breaching Brussels’ budget rules — the first time it has been put in the sin bin since Macron rose to power in 2017.
Investors are also awaiting a Bank of England policy decision later in the day, when it is expected to stand pat on rates at a 16-year high owing to ongoing price risks, analysts said.
That is despite data Wednesday showing headline consumer inflation had finally come down to the bank’s two percent target.
Julian Jessop, at the Institute of Economic Affairs think tank, added that officials would likely sit tight because services inflation remained well above two percent, while energy bills are set to rise towards the end of the year.
However, Neil Wilson at Finalto trading group said: “I fail to see any reason for the Bank to be holding off any longer — time to take a leaf out of the ECB playbook and trim some of the restriction.”
On currency markets, the euro remained under pressure against the dollar owing to France’s political uncertainty, while Switzerland’s franc dipped against the greenback after the country’s central bank cut interest rates for the second successive meeting. With AFP
