Philippine stocks succumbed to profit-taking Tuesday after the December inflation quickened and US stocks ended mixed.
The bellwether Philippine Stock Exchange index lost 79.79 points, or 1.2 percent, to close at 6,545.38, while the broader all-shares index fell 43.34 points, or 1.14 percent, to settle at 3,759,69.
The Philippine Statistics Authority reported that December inflation rate grew faster at 2.9 percent from previous month’s 2.3 percent.
The increase was largely due to higher spending during the holiday season as well as higher transportation and utility prices.
Full-year inflation remained within the government’s target of 2 percent to 4 percent.
Nicholas Mapa, head economist from Metrobank Research, said with inflation rate falling within target, this should still give the Bangko Sentral ng Pilipinas scope to continue easing in 2025.
Value turnover reached P4.312 billon, with 96 advancers, 124 decliners and 39 unchanged issues.
Foreign investors were net sellers, with outflows reaching P894.32million.
Five of sectoral indices ended in the red. Services dropped 1.88 percent, while property declined by 1.67 percent. Mining and oil rose 0.30 percent.
Aboitiz Equity Ventures Inc. was the top index gainer, rising by 2.2 percent to P35, while Wilcon Depot Inc. was the worst performer, declining 4.87 percent to P12.90.
Meanwhile, most markets rose in Asia on Tuesday following another rally on Wall Street sparked by tech giants as traders try to assess Donald Trump’s tariff plans following a report he may take a more targeted approach.
Eyes were also on the release of closely watched US jobs data at the end of the week after the Federal Reserve scaled back its interest rate cut expectations and took a more hawkish turn.
After a tepid start to the week, Asian investors fought to recover on Tuesday after a tech-fueled rally in the S&P and Nasdaq — with Nvidia hitting a record — as strong results from Taiwan-based chip giant Foxconn sparked a fresh rush for semiconductors.
The US gains were also helped after The Washington Post said Trump’s aides were weighing plans to apply tariffs only to goods in certain critical sectors — a more narrow definition than the president-elect previously proposed.
The report comes after Trump warned last year that he would slam huge levies on China, Canada and Mexico amid fears of a return to his hardball trade policy.
However, he later hit back at the Post story, saying it “incorrectly states that my tariff policy will be pared back. That is wrong”. He added that it was “just another example of Fake News”.
Most markets rose in early Asian business, with Tokyo up two percent helped by a weak yen, while Shanghai, Sydney, Singapore, Seoul, Taipei, Mumbai, Bangkok and Jakarta were also higher. Wellington and Manila fell.
Hong Kong also retreated as tech firms took a hit with Tencent diving more than seven percent after it was named by the United States in a list of “Chinese military companies”. Its US-listed shares shed 7.8 percent.
A spokesperson for Tencent said the company’s inclusion on the list “is clearly a mistake”, and that “we are not a military company or supplier”.
Still, Morningstar senior equity analyst Ivan Su said: “Given Tencent’s business model -—which primarily revolves around social networking and online gaming — we believe the company has a good chance to secure exclusion through US courts.”
Major battery manufacturer CATL, which was also named on the list, briefly sank more than five percent in Shenzhen before paring the losses.
The announcement came just weeks before Trump returns to the White House, with many commentators fearing another trade war with China.
There is also growing concern that his plans to slash taxes, remove regulations, impose tariffs on imports and crack down on immigration will reignite inflation, putting pressure on the Fed to keep borrowing costs higher for longer.
“While an aggressive Trump may try to deliver large fiscal stimulus, stronger demand would quickly run into a deteriorating supply side of the US economy,” said David Rees, senior emerging markets economist at Schroders.
“Despite being partially absorbed by the stronger US dollar and profit margins, substantially higher tariffs would be likely to increase goods inflation.
“But the greater threat to inflation probably comes from a crackdown on immigration, along with mass deportations, if it leads to labour shortages that would ultimately result in higher wages and services inflation.”
Friday’s non-farm payroll report is the next big marker for investors hoping for some idea about the Fed’s plans for rates after it scaled back its forecasts for cuts in 2025 last month.
London, Paris and Frankfurt opened lower. With AFP
