The Philippine stock market continued its downward streak, following regional decline, on heavy foreign selling ahead of the central banks’ policy meetings.
The Philippine Stock Exchange index dropped 32.63 points, or 0.50 percent, to close at 6,469.08, while the all-shares index also went down by 10.21 points, or 0.28 percent, to settle at 3,700.
This marked the market’s sixth straight day of decline.
“Philippine shares continued to drop ahead of FOMC [Federal Open Market Committee] meeting and following the sentiment of regional markets,” Regina Capital Development Corp. head of sales Luis Limlingan said.
The peso also tumbled to 58.99 against the US dollar Wednesday from 58.87 Tuesday, on anticipation the Bangko Sentral ng Pilipinas would cut its policy rates again.
Analysts said heavy foreign selling contributed to the stock market’s decline. Foreign investors are re-channeling their funds ahead of US Federal Reserve’s meeting. Foreign selling amounted to P487.26 million.
Value turnover reached P4.35 billion, below the year-to-date average of P5.17 billion. There were 83 advancers and 104 decliners, while 61 names were unchanged.
Industrial index ended in the green, rising 0.31 percent, while services climbed 0.62 percent. Mining and oil dropped 1.5 percent, followed by financials which went down by 1.23 percent and property which lost 0.71 percent.
Manila Electric Co. was the top index gainer, jumping by 4.13 percent to P479, while BDO Unibank Inc. was the main index decliner, falling 4.03 percent to P143.
Asian markets also swung Wednesday ahead of the Federal Reserve’s much-anticipated policy announcement, while shares in Japanese car titan Nissan soared more than 20 percent after reports said it was in merger talks with rival Honda.
There were few catalysts to drive region-wide activity before the US central bank’s interest rate decision, with Wall Street providing a negative lead as profit-takers moved in while economic data was mixed.
The Fed is widely expected to cut borrowing costs for the third successive time when it concludes its gathering later in the day but the main focus is on its statement, with traders hoping for guidance on its plans for next year.
With inflation coming down but hovering above the two percent target and the labour market still robust, decision-makers have been able to loosen their grip on policy since September amid optimism they can guide the economy to a soft landing.
However, with Donald Trump set to re-enter the White House next month, pledging tax cuts, deregulation and tariffs on imports from China, there are fears that prices could be reignited, forcing the Fed to re-evaluate its rates timetable.
“We are experiencing a whirlwind of change and uncertainty that profoundly affects global economies,” said Stephen Innes of SPI Asset Management.
“Questions loom: Will Donald Trump be a ‘Deal Maker in Chief’ or lean into his ‘Tariff Man’ persona? How will bond yields react? Can China effectively stimulate consumer demand? Will Trump broker peace in Eastern Europe? Will the dollar maintain its oppressive strength?”
He added that “the crucial question is whether the Federal Reserve will signal a pause starting from the January (policy) meeting”.
“My view leans toward an affirmative; the real intrigue, however, lies in how explicitly the Fed will beam this potential shift and confirm a ‘hawkish cut’.”
While Wall Street fell, Asian markets diverged. Hong Kong, Shanghai, Seoul, Bangkok and Taipei rose but Sydney, Singapore, Wellington, Mumbai, Jakarta and Manila fell.
London rose even as data showed UK inflation picked up in November, firming expectations the Bank of England will hold off cutting rates this week.
Paris and Frankfurt were also both up.
Tokyo closed down, although Nissan scorched 23.7 percent higher soon after opening in response to reports it was in preliminary merger talks with Honda, adding the move would help them better compete against Tesla and other electric vehicle makers.
Neither firm confirmed the reports but they agreed in March to explore a strategic partnership on EVs, which analysts said was aimed at catching up with Chinese competitors.
Nissan has been struggling, announcing 9,000 job cuts last month and slashing its annual sales forecast.
The rise was the biggest since 1974, according to Bloomberg News.
Honda fell about three percent, while Mitsubishi Motors — of which Nissan is the top stakeholder — gained 19.7 percent.
On currency markets, the yen edged down against the dollar ahead of the Fed decision, while traders also awaited the conclusion of the Bank of Japan’s Thursday meeting as debate swirls about when it will hike rates.
Bitcoin pared gains after earlier hitting a record of more than $108,315 on Wednesday. With AFP
