Stocks fell for a third day, in line with a global sell-off, as Federal Reserve chair Janet Yellen reinforced expectations for the first US interest-rate increase in almost a decade before the European Central Bank reviews monetary policy.
The Fed’s near-zero benchmark borrowing costs have supported demand for riskier assets, and an increase may lure money away as the dollar strengthens.
The Philippine Stock Exchange index, the 30-company benchmark, lost 72 points, or 1 percent, to close at 6,921.93 on Friday. It was also down 4.3 percent this year.
The broader index representing all shares also fell 34 points, or 0.9 percent, to settle at 3,993.23, on a value turnover of P5 billion.
Only two of the 20 most active stocks ended in the green, led by Metropolitan Bank & Trust Co., which advanced 1.9 percent to P82.50. Port operator Asian Terminals Inc. rose 0.2 percent to P11.08.
SM Prime Holdings Inc. fell 3.8 percent to P21.30. Robinsons Land Corp. dropped 1.7 percent to P28.65.
Meanwhile, Asian stocks also fell after the European Central Bank’s revised economic stimulus measures came up short.
Speculation has swirled for weeks that the ECB would ramp up its bond-buying program and further loosen monetary policy to inject some vim into a eurozone beset by years of torpid growth and stagnant inflation.
The bank cut deposit rates further into negative territory—meaning lenders must pay to park cash with it and so look to loan more—and extended the length of its bond purchases.
However, the long-awaited announcement was seen as a huge let-down as it crucially failed to increase the size of the stimulus while the rate cut was less than hoped for.
“The market was hoping for some Draghi magic, but instead got some Draghi shock,” Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group in Tokyo, told Bloomberg News.
“I’d thought that for a recovery in the European economy we’d need some bold easing measures, but since Draghi seems to be taking the economic recovery lightly, it’s possible that it could take a turn for the worse for some time.”
Asian stock markets were all in the red, with Tokyo ending down 2.2 percent, Shanghai shedding 1.7 percent and Sydney 1.5 percent lower. Hong Kong was 0.9 percent off in late trade.
The losses followed hefty falls in Europe and New York. Paris and Frankfurt plunged 3.6 percent each and London lost more than two percent, while Wall Street’s three main indexes shed between 1.4 and 1.7 percent. With AFP, Bloomberg