Stocks fell Tuesday, on fresh indications the US Federal Reserve will lift interest rates again this year.
The Philippine Stock Exchange index, the 30-company benchmark, shed 25 points, or 0.3 percent, to close at 7,917.86, as five of the six major sectors declined.
The heavier index, representing all shares, also lost 3 points, or 0.1 percent, to settle at 4,719.24, on a value turnover of P7.1 billion. Advancers outnumbered gainers, 95 to 91, while 52 issues were unchanged.
Ten of the 20 most actives stocks ended in the green, led by Metro Retail Stores Group Inc. which surged 8.6 percent to P4.55 and Wilcon Depot Inc. which went up 8.3 percent to P7.58. Eagle Cement Corp. climbed 4.4 percent to P16.24.
Meanwhile, Tokyo’s Nikkei rallied Tuesday as the dollar extended gains against the yen. However, most other regional markets struggled after Monday’s healthy gains, despite being given a positive lead from Wall Street where the Dow and SP 500 closed at fresh record highs.
One of the key drivers of Monday’s US rally were comments from influential New York Federal Reserve Bank president William Dudley, who reaffirmed the bank’s plan to press on with its rate hikes and forecast of higher inflation.
He said that despite tepid price rises, he was confident that “if the labour market continues to tighten, wages will gradually pick up”.
“Hitting the right chords and sounding dismissive about the recent slowdown in inflation, an unrepentantly hawkish Dudley provided the USD bulls with enough fodder,” Stephen Innes, senior trader at Oanda, said in a note.
The remarks came after Fed boss Janet Yellen sounded a more hawkish tone than usual, while the central bank set out plans to wind down its asset holdings to suck cash out of the financial system.
The greenback jumped in US trade and kicked on in Asia, heading towards 112 yen for the first time since the end of May.
Tokyo stocks ended 0.8 percent higher, with exporters key winners thanks to the weaker yen, while tech firms bounced after two weeks of sharp losses.
However, airbag maker Takata plummeted 20 percent, meaning it has lost a third of its value in just two days following reports it will file for bankruptcy protection and sell its assets to a US company.
Japan’s Nikkei business daily said last week the company, with liabilities exceeding $9 billion, would make a formal decision about the filing at a board meeting this month.
Other major markets struggled, though. Hong Kong lost 0.2 percent, Sydney fell 0.8 percent and Seoul gave up 0.1 percent. Singapore was marginally lower while Wellington and Manila were also down.
Shanghai slipped 0.8 percent as investors await a decision by MSCI on whether to include it in its list of emerging market benchmark indexes.
The bourse has been denied for the previous three years over concerns about certain restrictions, despite Beijing providing greater access to its domestic, yuan-based capital markets.
MSCI said China still maintains problematic restrictions including a 20 percent monthly repatriation limit, which it called “a significant hurdle for investors,” and too many restrictions on new financial product offerings.
In early European trade London rose 0.1 percent, Paris added 0.4 percent and Frankfurt put on 0.3 percent. With Bloomberg, AFP