Share prices dropped Wednesday on risk aversion as investors waited with bated breath for the results of US presidential elections.
The aversion extended to the peso which dropped anew after appreciating on Tuesday.
The Philippine Stock Exchange (PSE) index was down 92.25 points to 7,165.42, a 1.27 percent drop.
The broader All Shares index was down 23.54 points or 0.59 percent to 3,969.97.
Losers edged gainers 105 to 83 with 49 stocks unchanged. Trading turnover reached P4.58 billion.
The peso closed at 58.661 to the dollar, down from 58.315 on Tuesday.
The currency opened at 58.50, an intraday high, hitting a low of 58.77. Trading turnover reached $1.91 billion.
Luis Limlingan, managing director at Regina Capital and Development Corp., noted anxious investors sold the market as they await the final results of the US election, “with only a few battleground states left for contention before market closed.”
“Traders were also watching Congress’ potential impact on spending and tax policy. Investors are additionally awaiting the Federal Reserve’s rate decision on Thursday and chair (Jerome) Powell’s policy outlook,” Limlingan sad.
But much of that attention is fixed in the unfolding US election race as Trump led Harris at press time.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said investors expect a Trump victory to “lead to higher US inflation amid possible more protectionist policies/trade war that could lead to higher tariff rates on imports from China and other countries.”
Another Trump term will also result to tighter immigration rules “that could increase US labor costs, deficit spending/wider US budget deficit on possible tax cuts, economic stimulus, among others, Ricafort said.
This could result to a “more cautious signals on future Fed rate cuts from some Fed officials,” Ricafort added.
Singapore’s dollar and Thailand’s baht slid the most among Asian currencies on Wednesday, while the Mexican peso hit a two-year low as the dollar surged on projections that Republican Donald Trump had won the US presidential election.
The dollar was set for its biggest daily rise since March 2020 against major peers, and US Treasury yields also soared to multi-month peaks.
Fox News projected that Trump has won the US presidency defeating Democrat Kamala Harris, and Republicans took control of at least one chamber of Congress. Other media outlets were yet to call the race.
Analysts view Trump’s proposed tariff and immigration policies as inflationary, and are therefore likely to put upward pressure on prices, bond yields and the dollar, and undermine the currencies of trading partners.
“The market is making positioning adjustments to prepare for a possible Trump victory,” said Ken Cheung Kin Tai, chief Asian FX strategist at Mizuho Bank.
“Regional investors are particularly worried about the impact from tariffs because most Asian economies rely on trade growth.”
At the PSE, Most actively traded International Container Terminal Services Inc. was down P13.80 to P395.20. BDO Unibank Inc. was down P6 to P150. SM Prime Holdings Inc. was down P1.05 to P29.80. Ayala Land Inc. was down P1.50 to P33. SM Investments Corp. was steady at P962. Bank of the Philippine Islands was up P0.30 to P143.80. Metropolitan Bank and Trust Co. was up P0.80 to P77.80. Aboitiz Equity Ventures Inc. was up P0.40 to P35.80. DigiPlus Interactive Corp. was down P0.35 to P20.90. JG Summit Holdings Inc. was steady at P24.
