Stocks fell Tuesday to end a four-day advance, as investors await a key European Central Bank meeting and developments in the China-US trade talks.
The Philippine Stock Exchange index, the 30-company benchmark, shed 30 points, or 0.4 percent, to close at 7,929.48. Despite the loss, it was still up 6.2 percent since the start of the year.
The broader all-share index also dropped 12 points, or 0.3 percent, to settle at 4,786.45 on a value turnover of P5.2 billion. Losers edged gainers, 92 to 91, while 56 issues were unchanged.
Ten of the 20 most active stocks ended in the green, led by Vulcan Industrial & Mining which climbed 5.7 percent to P1.30 and Global Ferronickel Holdings Inc. which rose 3.7 percent to P1.70. PLDT Inc. advanced 2.2 percent to P1,180.
Meanwhile, Asian equity traders struggled after last week’s rally as the ECB prepares for a much-anticipated meeting on Thursday with speculation it will unveil fresh economy-boosting measures including an interest rate cut deeper into negative territory.
“With the two percent inflation target still a Japanese-style distant memory and growth slowing in Germany, Europe’s engine, the ECB had to do something,” said OANDA senior market analyst Jeffrey Halley.
“Whatever comes out on Thursday will test the limits of the effectiveness of monetary policy,” he said.
There were warnings from some analysts that a disappointing response from the bank could deal a heavy blow to equities.
The ECB announcement comes a week before the Federal Reserve’s next meeting, where it is tipped to announce a further reduction in borrowing costs following weak jobs figures and signs of slowing in the economy.
However, other, more upbeat readings have kept traders guessing about the Fed’s plans, while reports on consumer prices and retail sales this week will provide more of an idea about the outlook.
Hong Kong was flat in afternoon trade while Shanghai slipped 0.1 percent as data showed Chinese producer prices continued to fall in August, hit by falling demand and the US trade war. Consumer prices stabilized with major support coming from a surge in pork prices caused by swine fever that has ravaged the country’s pig industry.
Neil Wilson, chief market analyst at Markets.com, flagged concerns about the impact of the weakness in China.
“The fear is not just that it signals weakness in domestic and overseas demand, but that China is exporting deflation by cutting prices and making it even harder for central banks like the ECB to achieve their inflation goals,” he said in a note.
Sydney dropped 0.5 percent, while Taipei, Wellington and Bangkok were also down. Tokyo ended 0.4 percent higher, while Singapore and Seoul were in positive territory.
There was little major reaction to US Treasury Secretary Steven Mnuchin saying there had been “lots of progress” on trade talks between China and the US.
Dealers are instead waiting for more concrete developments as the two sides prepare for high-level talks in Washington next month.
Regional energy firms were given a leg-up by thanks to gains in oil prices that came after Saudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, said output cuts would benefit all exporting nations.
The remarks suggested he would support reductions to address an oversupplied market and sagging prices. With AFP