Last-minute bargain hunting pushed the bellwether index in positive territory, but most stocks traded lower against a backdrop of overseas concerns that challenged investor confidence.
The Philippine Stock Exchange index (PSEi) inched up14.85 points to settle at 6,511.57, a 0.23 percent increase from Wednesday’s close.
The broader All Shares index was up 7.44 points or 0.2 percent to 3,757.29.
However, losing stocks outnumbered gainers 108 to 99 with 39 stocks unchanged, as the bellwether PSEi traded mostly in the red during the session. Turnover was valued at P4.52 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said investors took their cue from Bangko Sentral Governor Eli Remolona’s statement about the Philippine economy being still in good shape.
The central bank chief noted they still have room to cut rates as the policy rate remains restrictive.
“The PSEi also corrected slightly higher after US stock markets mostly gained slightly overnight,” he said.
Meanwhile, Jonathan Ravelas, managing director at emanagement for Business and Marketing Services, expects more leeway for the market to go down and revisit the 6,000-6,300 level.
The PSEi fell below 6,500 to 6,496.72 [intraday], as the market went on an extended selloff, Ravelas noted. Traders weighed concerns over the coming trade war when US President-elect Donald Trump takes office, he said.
The peso closed at 58.50 to the dollar, down from 58.353. It opened at 58.45, hitting a high of 58.333 and a low of 58.62. Trading turnover reached $1.83 billion.
Most Asian currencies edged lower as growing concerns that US President-elect Donald Trump’s proposed policies may fuel inflation and derail plans by central banks to cut interest rates, giving sentiment toward risky assets a dent.
CNN reported on Wednesday that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries.
US Federal Reserve officials worry that Trump’s proposed tariffs, which include 10 percent on global imports and around 60 percent on Chinese goods, as well as his immigration policies may prolong the fight against rising prices.
“While a less dovish Fed may mean smaller room for some Asian central banks to maneuver as far as FX is concerned, monetary policy decisions are mostly based on domestic fundamentals,” Frances Cheung, rates strategist at OCBC said. “Our base-case is a total of 75 basis points of Fed funds rate cuts this year, which already represents a well-slower pace of rate cuts …”
The Thai baht slipped 0.2 percent while the Taiwan dollar retreated 0.3 percent.
“Building up to the Trump inauguration, markets are likely to stay anxious on the first Trump policy announcements, keeping the pressure on Asian FX …” a Maybank analysts said in a note.
“Even so, with sentiments prone to swings, any release of good news such as signs of better US–China relations can give quite some relief to Asian FX,” the analyst added.
Tariff threats on China, a major trading partner for Asian countries, compound existing concerns about growth and deflation in the world’s second-largest economy, with recent data pointing towards demand weakness despite Beijing’s stimulus measures.
The Chinese yuan, which has been under selling pressure recently, was steady, hovering around a 16-month low.
Markets are awaiting the US jobs report on Friday for clues on the outlook for Fed policy.
Philstocks Financial Inc. told investors in a note that adding to market-dampening factors was the inflationary concerns raised by the US Fed as revealed in the notes of its meeting in December.
