The Philippine Stock Exchange index (PSEi) extended its losing streak Wednesday, dropping below the 6,500 level, as US markets fell overnight.
The PSEi, which comprises the 30 largest public companies in the country, lost 48.66 points, or 0.74 percent, to close at 6,496.72, while the wider all-shares index went down by 0.84 points, or 0.02 percent, to settle at 3,749.85.
“Philippine shares continued to slide following the sentiment in the overseas equities market, with the benchmark closing several points below 6,500, down 0.74 percent.” Regina Capital Development Corp. head of sales Luis Limlingan said.
He said US stocks also fell Tuesday as strong economic data raised doubts about potential Federal Reserve rate cuts, driving Treasury yields higher and dragging tech stocks lower.
Limlingan said US services index also reported faster growth in December, fueling inflation concerns.
The peso retreated to 58.39 against the US dollar Wednesday from 58.18 Tuesday.
The positive Philippine unemployment data did not help boost investor sentiment. The Philippine Statistics Authority (PSA) said unemployment rate decreased to 3.2 percent in November 2024 from 3.6 percent in the same month last year.
Value turnover at the stock market reached P4.355 billion, with 110 advancers, 106 decliners and 44 unchanged issues.
Globe Telecom Inc. climbed 5.02 percent to P2,300, while Ayala Corp. dropped 2.89 percent to P587.50.
Meanwhile, Asian equities wavered on Wednesday as sentiment was knocked by a sell-off on Wall Street sparked by data indicating the US economy and jobs market remained robust, further denting hopes for interest rate cuts.
With inflation worries already elevated owing to Donald Trump’s pledges to slash taxes, regulations and immigration when he returns to the White House, the latest readings added to uncertainty on trading floors.
A closely watched survey of the crucial US services sector saw a pick-up in December, with the prices component soaring far more than expected to hit the highest level since last January.
A separate report showed job openings also outstripped forecasts in November to touch a six-month high.
The readings made the case for the Federal Reserve to slow its pace of rate cuts, having lowered them three times last year thanks to easing inflation.
Focus now turns to Friday’s release of the key non-farm payrolls report, which will provide a fresh snapshot of the state of the labour market and US economy.
Yields on key 10-year US Treasuries rose and options suggest they could hit five percent for the first time since October 2023, according to Bloomberg News.
That comes after the central bank undertook a more hawkish pivot last month and lowered its outlook for cuts, while several decision makers have recently championed a more cautious approach.
All three main indexes on Wall Street ended in the red on Tuesday, with the Nasdaq and S&P 500 shedding more than one percent each.
Tech firms, which had led a surge the previous day, were again the key drivers of action, with chip titan Nvidia tanking after a disappointing product presentation.
Asian markets, however, diverged.
Tokyo, Hong Kong, Taipei, Manila, Mumbai and Jakarta all fell, though Sydney, Singapore, Seoul, Wellington and Bangkok rose. Shanghai barely moved.
London and Frankfurt edged up at the open, while Paris was flat.
“Recent Fed signals suggest a cautious approach to rate cuts amid a resilient job market and sticky inflation,” said Stephen Innes.
“Still, investors are now unanimously betting against any rate changes this month. Moreover, according to the CME FedWatch Tool, odds are tipping below 50 percent for a rate cut before June, underscoring a tense watch on the Fed’s next moves.” With AFP
