Share prices closed lower Monday after a shortened trading week last week as investor risk aversion intensifies ahead of the US election on Tuesday.
The peso also closed lower.
The Philippine Stock Exchange index (PSEi) was down 6.85 points to 7,136.1, a 0.1 percent drop. The broader All Shares index was down 5.55 points or 0.14 percent to 3,951.66.
Losers edged gainers 107 to 76 with 58 stocks unchanged. Trading turnover reached P4.65 billion.
The peso closed at 58.34 to the dollar, down from last week’s 58.1.
The currency opened at 58.27, hitting a high of 58.15 and a low of 58.35. Trading turnover reached $1.18 billion.
Luis Limlingan, managing director at Regina Capital Development Corp., said the market’s focus “intensifies on key US events, with investors keeping a close watch on the November 5 elections and the Federal Reserve’s policy meeting.”
“Any indications from the Fed regarding future rate adjustments could shape market sentiment,” he said.
Most actively traded BDO Unibank Inc. was down P1.30 to P151.50. Ayala Land Inc. was up P0.30 to P33. International Container Terminal Services Inc. was up P9 to P405. SM Prime Holdings Inc. was down P1.05 to P29.60. Bank of the Philippine Islands was down P1.50 to P141.70. Ayala Corp. was steady at P690. DigiPlus Interactive Corp. was up P0.70 to P20.80. Metropolitan Bank and Trust Co. was down P0.50 to P75.50. Philippine Seven Corp. was up P6 to P79. SM Investments Corp. was up P18 to P959.
“Last week was basically the dollar rallying on greater expectations of a Trump victory. Now, I think as we get closer to the actual event, there’s a little bit of rebalancing going on,” said Robert Carnell, regional head of research, Asia Pacific at ING.
“Even if Trump wins, which would normally be dollar-positive, the initial response might not be for a dollar rally. Hence, investors are squaring positions,” he added.
Investors are also awaiting inflation data from South Korea, Philippines, Thailand and Taiwan to gauge the rate outlook.
Last month, Bank of Korea, Bank of Thailand and Bank Indonesia kicked off their easing cycles, while the Philippine central bank reduced rates by another 25 bps.
Most Asian central banks will ease policies more slowly than the Fed over the coming year as inflation remains broadly within targets and growth is still resilient, a Reuters poll showed.
“A stronger dollar makes local central banks in the Asia region just a little bit more hesitant about easing their own policy rates. They don’t want to cut and then just see the benefits of that washed away in a weak currency, which then ends up bringing in more inflation,” said Carnell.
The Malaysian central bank is expected to keep rates steady at 3.0 percent on Wednesday, and hold it there at least through 2025.
Most Asian currencies rose on Monday, as the dollar skidded at the start of a crucial week dominated by the US presidential election, the Federal Reserve policy meeting and a slew of inflation reports from Asian economies.
The South Korean won and the Singapore dollar climbed 0.5 percent and 0.6 percent, respectively.
The dollar was down 0.5 percent as market participants braced for the US election on Tuesday and the Fed’s rate decision on Thursday.
Democratic candidate Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls, while a 25-basis-point Fed rate cut has been fully priced in.
In China, the Standing Committee of the National People’s Congress is meeting from Nov. 4 to 8, with markets widely expecting the approval of more fiscal stimulus measures. –with Reuters