Philippine stocks declined Wednesday amid negative market sentiment overseas as concerns about less aggressive rate cut by the United States Federal Reserve weighed on the market.
“Philippine stocks slipped along with Wall Street, as investors grappled with ongoing concerns about rising interest rates and processed the latest earnings reports released this week,” Regina Capital and Development Corp. head of sales Luis Limlingan said.
The Philippine Stock Exchange index slipped by 45.50 points, or 0.61 percent, to close at 7,367.66, while the broader all-shares index dropped 34.74 points, or 0.85 percent, to settle at 4,050.76.
Limlingan said investors were also concerned about the impact of typhoon Kristine on the country’s economy. Investors are also awaiting third-quarter financial reports of listed firms.
Veteran stockbroker Jonathan Ravelas said a sustained fall below the 7,300 level could accelerate the market’s decline back towards the 6,800 to 7,000 level.
Mining and oil led the sectors, increasing by 0.43 percent, while holding firms advanced by 0.08 percent. Services lost the most, declining by 1.92 percent, while property went down by 1.04 percent.
Value turnover was weak at P4.078 billion, as a number of institutions were closed over the impact of the typhoon. Decliners edged advancers, 128 to 71, while 55 names were unchanged.
Monde Nissin Corp. rose 3.79 percent to P11.50, while Globe Telecom dropped 3.35 percent to P2,310.
Meanwhile, Asian equities diverged Wednesday after another unremarkable day on Wall Street, where rising bond yields and comments from Federal Reserve officials dampened expectations for US interest rate cuts.
A global rally that has seen several markets hit multiple records — particularly in New York — appears to have run out of gas as traders assess the US central bank’s plans in the wake of forecast-topping economic data and ahead of a tight presidential election.
They are also keeping tabs on Beijing, hoping for more measures to reignite growth after a slew of stimulus over the past month, while geopolitical tensions helped push safe-haven gold to another peak.
Bets on another bumper 50-basis-point rate cut at the Fed’s next meeting have dwindled following a recent spate of data showing the world’s top economy in rude health and the labour markets resilient.
A number of key members of the bank’s policy board have said that while they are in favor of further reductions, they did not want to go too quickly.
That comes as markets eye a possible Donald Trump victory in next month’s presidential polls, which observers warn could see him implement tax cuts and impose tariffs that could restoke inflation.
Treasury yields are at their highest since July.
“Investors are navigating a tangled web of geopolitical tensions in the Middle East, a Federal Reserve turning out less dovish than expected, and the sudden reawakening of the ‘Trump Trade’,” said Stephen Innes, managing partner at SPI Asset Management.
“The latter has shaken the bond market, forcing some bond traders to pull their heads out of the sand as real jitters emerge about the fiscal landscape post-election.”
The Dow and S&P 500 both fell for a second straight day on Wall Street, having ended at fresh peaks Friday, though the Nasdaq ticked higher.
Asian markets fluctuated.
Tokyo ended down despite a weaker yen caused by a softening of expectations on US rate cuts. The Japanese unit is sitting at more than 152 per dollar, levels not seen since July.
However, shares in Tokyo Metro rocketed 45 percent on their debut after its government owners raised $2.3 billion in Japan’s biggest initial public offering for six years.
Wellington, Manila, Jakarta and Taipei also fell.
Hong Kong climbed more than one percent, building on the healthy run-up enjoyed in the wake of China’s raft of economic support measures.
Shanghai also advanced, along with Sydney, Seoul, Singapore and Mumbai.
London edged up but Paris and Frankfurt dipped.
Gold touched a new record of $2,755.47 on the uncertainty over the US vote as well as fears about the Middle East crisis as Israel plots its retaliation against Iran after this month’s missile barrage by Tehran.
The geopolitical concerns offset the rowing back of US rate-cut bets that had helped propel bullion higher in recent months.
Oil ticked down after surging more than two percent Tuesday in reaction to Chinese authorities lifting import quotas on independent oil refineries from next year in a sign growth may be recovering. Jenniffer B. Austria with AFP
