Share prices on Philippine Stock Exchange slipped Wednesday in line with peer markets amid fears the latest US economic numbers could be indicating the US Federal Reserve Bank might take time to lower interest rates.
The PSEi dropped 48.66 points to 6,496.72, down 0.74 percent.
The broader All Shares index declined by 0.84 point or 0.02 percent to 3,749.85.
Gainers edged losers 110 to 106 with 44 issues closing unchanged. Trading turnover reached P4.69 billion.
Luis Limlingan, managing director at Regina Capital and Development Corp., said investors tracked overseas markets, which declined after the overnight drop on Wall Street.
The latest US jobs numbers “raised doubts about potential Federal Reserve rate cuts, driving Treasury yields higher and dragging tech stocks lower,” he added.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC) said the strong jobs report from the Philippines did not have a bearing on the local market.
Investors focused more on the better jobs report in the US, released overnight, as well as the ISM manufacturing data, which hinted at an improving US economy, dampening the urgency of further rate cuts by the US Fed, Ricafort said.
Seth Pangan, Diversified Securities Inc. trader, said however, continued improvement in the local jobs data moving forward could encourage investors to sink more funds into Philippine stocks.
“It’s a lagging indicator. and December is usually a heavy spending month. If the (jobs) improvement persists, then we can conclude that this will add up to growth with the additional spending,” Pangan said.
The peso closed at 58.395 to the dollar, down from 58.185. The local currency opened at an intraday low of 58.20, before trading at session’s low of 58.40. Trading turnover reached $1.74 billion.
Emerging market currencies in Asia fell on Wednesday, led by the Indonesian rupiah and the Taiwanese dollar, as the US dollar gained strength as US jobs data showed there was no rush for the Federal Reserve to lower interest rates.
The MSCI index, tracking EM currencies, fell 0.2 percent, its worst day in nearly three weeks.
S jobs data overnight suggested a healthy labor market, reflecting enough leeway for the Fed not to ease rates at this point. That sent the dollar index to near two-year peaks and 10-year Treasury yield to its highest since April, making emerging market investments less appealing in comparison.
“Higher-for-longer (US interest rates) may weigh on sentiment as yield differentials favor the U.S.,” Christopher Wong, currency strategist with OCBC, said in an email. “EMs that take on a more dovish stance may see their FX come under pressure. For instance, PHP, INR and to some extent, IDR.”
The Taiwan dollar and Indonesian rupiah each declined by 0.5 percent. The Malaysian ringgit fell 0.2 percent.
The Chinese yuan dropped to a fresh 16-month low. It has been routinely knocked lower amid fears of higher US tariffs once Donald Trump takes oath as the US president.
arclays said Singapore’s central bank could lower interest rates at this month’s policy meeting since the country’s core inflation has likely cooled faster and slightly more than expected.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC)., meanwhile said investors also remained concerned about the incoming Trump administration, as markets anticipate possible protectionist policies in light of recent signals from President-elect Donald Trump.
Most actively traded BDO Unibank Inc. was up P1.50 to P147 per share. Metropolitan Bank and Trust Co. was down P0.80 to P74.50. Bank of the Philippine Islands slipped P2.40 to P120.60.
International Container Terminal Services Inc. was down P3 to P397. SM Investments Corp. declined by P12.50 to P880.50. Jollibee Foods Corp. gained P3 to P267. SM Prime Holdings Inc. dropped P0.60 to P24.10. DigiPlus Interactive Corp. closed lower by P2.50 to P26. Ayala Corp. declined by P17.50 to P587.50. Globe Telecom Inc. gained P110 to P2,300.
