Share prices dropped Thursday on risk aversion as the US Fed kept interest rates steady.
The peso closed up.
The Philippine Stock Exchange index was down 53.94 points to 6,646.55, a 0.81 percent drop.
The broader All Shares index was down 21.36 points or 0.61 percent to 3,504.58.
Losers edged gainers 110 to 76 with 54 stocks unchanged.
Trading turnover reached P4.77 billion.
The peso closed at 57.535 to the dollar, up from 57.76 on Wednesday.
The currency opened at 57.70 and hit a high of 57.435 and a low of 57.74.
Trading turnover amounted to $1.54 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. , said the peso closed up in tandem with other currencies.
Among Southeast Asian currencies, the Thai baht was the biggest gainer in the region, appreciating 0.8 percent against the US dollar, while the Singaporean dollar edged 0.2 percent higher, Reuters reported.
Overnight, the US Fed held interest rates steady and signalled it is still leaning towards eventual cuts, but put a red flag on recent disappointing inflation readings that could possibly delay rates cuts.
It would be positive for the emerging Asia markets if the Fed starts cutting rates as expected, said Poon Panichpibool, a markets strategist with Krung Thai Bank.
“However, the pace of rate cuts and reasons behind the decision should be scrutinized carefully as well. For instance, if the Fed aggressively cuts rates due to incoming economic recession, that might not bode well for EM Asia markets.”
Markets are currently pricing in a 55 percent chance of a rate cut in September, according to the CME FedWatch Tool.
Markets in Mainland China were closed for a public holiday. Mikhail Philippe Plopenio, analyst at Philstocks Financial Inc., said the local stock market dropped as investors worry that inflation for April “may grow faster than March’s 3.7 percent and even exceed the upper end of the government’s target range based on the Bangko Sentral ng Pilipinas’ (BSP) latest forecast.”
“Adding to the woes was the Federal Reserve’s statement which expressed the lack of greater confidence on the US’ inflation. The statement further tempered early rate-cut hopes from the Fed and consequently the BSP. It also caused concerns towards the local currency which has an effect on the local bourse,” he said.
Most actively traded International Container Terminal Services Inc. was up P17 to P348.
Metropolitan Bank and Trust Co. was up P1.90 to P71.90. SM Investments Corp. was down P14 to P936. Ayala Land Inc. was down P1.05 to P27.70. BDO Unibank Inc. was down P2.10 to P146.10. SM Prime Holdings Inc. was steady at P27.95. DigiPlus Interactive Corp. was up P1.56 to P12.34. Manila Electric Co. was down P4 to P365. Jollibee Foods Corp. was down P9.40 to P226. Ayala Corp. was down P14 to P601.
