Share prices ended lower on profit taking. The peso was also down.
The Philippine Stock Exchange index (PSEi) went down by 26.85 points, a 0.42 percent drop to 6,392.09. The broader All Shares index was down 3.28 points or 0.1 percent to 3,376.30.
Gainers edged losers 92 to 82 with 49 stocks unchanged. Trading turnover reached P7.23 billion.
The peso closed at 57.35 to the dollar, down from 57.21 on Tuesday. It opened at 57.38, hitting a high of 57.34 and a low of 57.58. Trading turnover reached $1.02 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the drop in the peso came amid slightly higher global commodity prices, such as crude oil prices, and slightly higher US dollar against major global currencies.
Reuters reported that emerging Asian currencies skidded on Wednesday amid fears of escalating geopolitical tension after NATO-member Poland reported an explosion by what it called a Russia-made missile.
A missile that killed two people in Poland was probably not fired from Russia, US President Joe Biden said after an emergency meeting of NATO leaders. Russia denied it was responsible for the explosion.
The South Korean won and Indonesian rupiah shed 0.6 percent each, leading losses as reports of the explosion triggered an outflow from risk-sensitive emerging markets into the US dollar which posted its sharpest fall in seven years late last week.
“The missile strike in Poland provided markets the excuse to cover the outsized USD sell-off in the past two weeks… I think this is premature” said Philip Wee, FX Strategist at DBS Bank.
The Philippine peso and Indian rupee slid about 0.3 percent each against a firming greenback, while Malaysia’s ringgit reversed earlier gains to inch lower.
Risk sentiment was further dampened by the chief of the World Trade Organization warning that many major economies would likely face a recession as the war in Ukraine, rising food and fuel costs, and soaring inflation cloud the global outlook.
“This year’s aggressive rate hikes should hit the world economy mainly in 2023…. We recommend bonds over stocks, as well as a healthy allocation to cash,” Barclays analysts wrote.
Meanwhile, news of the Poland explosion and its potential implications took some focus away from two key regional central bank meetings due on Thursday.
Markets have already priced in a 75-basis-point interest rate hike in the Philippines and a 50-basis-point rise in Indonesia.
Malaysia is also due to hold an election this weekend, which analysts said could trigger some near-term volatility in the ringgit.
“There could still be quite a bit of uncertainty in terms of policy making that could reverse some of the MYR gains in the near-term,” Maybank analysts said in a note.
The currency had strengthened nearly 4 percent since Friday as the dollar weakened due to softer US inflation data and amid an improvement in broader sentiment after China eased some of its stringent COVID restrictions.
Claire Alviar, analyst at Philstocks Financial Inc., said the drop is also part of profit taking after three straight days of the market rally.
Investors are waiting for the result of the Central Bank’s meeting that will happen Thursday.
“At the BSP meeting, aside from the anticipated interest rate hike, we think that investors will be waiting for the outlook of the central bank toward the inflation rate at least for the end of the year,” she said.
Most actively traded BDO Unibank Inc. was down P5 to P129. Converge ICT Solutions Inc. was up P1.14 to P15.08. SM Prime Holdings Inc. was down P0.15 to P34.80. SM Investments Corp. was steady at P870. Ayala Land Inc. was up P0.50 to P27.80. Jollibee Foods Corp. was down P5 to P243. Ayala Corp. was down P17 to P670. International Container Terminal Services Inc. was up P3.70 to P187.60. Bank of the Philippine Islands was up P0.95 to P96.60. GT Capital Holdings Inc. was down P0.80 to P407.
