Share prices took a beating Monday as market sentiment sagged following a tumble in other Asian markets.
The Philippine Stock Exchange index (PSEi) slumped 153.22 points or 2.36 percent to close at 6,343.10.
The broader All Shares index dropped 49.94 points or 1.33 percent to 3,704.91.
Losers outnumbered gainers 123 to 68, while 51 issues closed unchanged. Trading turnover reached P4.96 billion.
“Market plunged as it took into consideration the rising inflation expectations in the US, together with the possibility of the Federal Reserve slowing down with its policy-easing,” Philstocks Financial Inc. said in a note to investors.
The PSEi dipped below the 6,400-point level as a result of dampened market sentiment, Luis Limlingan, managing director at Regina Capital and Development Corp., said.
The MSCI gauge of Asian emerging market equities dropped1.8 percent to its lowest since early August.
Analysts were one in pointing to the shift in US sentiment for the sell-off as the latest jobs report pointed to a strong economy that was likely to delay any further rate cuts by the US Fed.
A strong US jobs report late on Friday left traders heavily scaling back their expectations for Fed cuts. Markets now expect just 27 basis points of rate cuts in 2025, with the terminal rate now seen around 4.0 percent compared to 3.0 percent before the report, Reuters reported.
“Given a resilient labor market, we now think the Fed cutting cycle is over,” said Bank of America’s senior US economist Aditya Bhave.
“Our base case has the Fed on an extended hold. But we think the risks for the next move are skewed toward a hike,” he added.
Currencies in emerging Asian markets meanwhile declined on Monday, with the Indonesian rupiah and Malaysian ringgit hovering near three-week lows, as traders dialled back their bets on US Federal Reserve rate cuts after a robust jobs report.
The peso closed at 58.70 to the dollar, down from 58.36 on Friday. The currency opened at 58.525, hitting a high of 57.50 and a low of 58.70. Trading value reached $1.82 billion.
An MSCI index of broad emerging market currencies slipped to its lowest since early July. Rupiah declined as much as 0.7 percent while the ringgit slipped 0.5 percent, both pinned close to their weakest since mid-December.
The US dollar jumped to its highest in more than two years on Monday, while the 10-year US Treasury yield was at a 14-month high.
In Indonesia, the central bank entered the foreign exchange market on Monday to safeguard the rupiah’s stability and secure market confidence.
Bank Indonesia is set to meet later this week — the first time this year — after it held rates steady in its last three meetings, contrary to the two rate cuts expected after it embarked on its easing cycle in mid-September last year.
“BI will struggle to find the respite on the currency front needed to resume policy rate cuts this year,” analysts at Barclays said in a note. They have pushed their view of two quarter-point rate cuts to 2026 from 2025.
In China, the yuan rose marginally in the wake of the policy measures announced on Monday to defend the weakening currency. It was last trading at 7.3318, hovering around its 16-month lows.
South Korea’s won was largely flat at 1,470.80 per dollar, while Taiwan’s dollar slipped 0.5 percent. Singapore’s dollar, Thailand’s baht and Malaysia’s ringgit weakened marginally.
Most actively traded Philippine shares include BDO Unibank Inc., down P0.80 to P146.70. Ayala Land Inc. dropped P1.25 to P25.25. SM Investments Corp. declined by P36 to P834. SM Prime Holdings Inc. lost P0.30 to P23.80. International Container Terminal Services Inc. shed P6.80 to P392.20. Ayala Corp. was P30 lower at P583. Bank of the Philippine Islands slipped P2.80 to P118.10. Jollibee Foods Corp. lost P7.40 to P255. Metropolitan Bank and Trust Co. declined by P2.20 to P71.10. AREIT Inc. gained P0.85 to P41.65. (With additional report from Reuters)