Stocks fell for a third day since President Rodrigo Duterte declared a state of emergency to address lawlessness, dragging the benchmark index to a 10-week low, despite the gains in other Asian markets.
The Philippine Stock Exchange index, the 30-company benchmark, sank 100 points, or 1.3 percent, to close at 7,619.10 Wednesday. It reduced the market’s gains this year to 9.6 percent.
The heavier index, representing all shares, also tumbled 51 points, or 1.1 percent, to settle at 4,542.35, on a value turnover of P10.3 billion. Losers outnumbered gainers, 125 to 65, while 43 issues were unchanged.
Duterte’s crude comments against President Barack Obama also raised concerns among investors over the new president’s diplomatic policy. The peso also dropped for a third day to close at 46.69 against the US dollar Wednesday.
Only four of the 20 most active stocks ended in the green, led by port operator International Container Terminal Services Inc. which climbed 4.5 percent to P81.50 and First Gen Corp. which gained 0.6 percent to P25. LT Group Inc. rose 0.4 percent to P17.06, while PLDT Inc. added 0.2 percent to settle at P1,810.
Meanwhile, Asian stocks excluding Japan climbed Wednesday, after weak data on the US services industries bolstered speculation that the Federal Reserve would keep interest rates lower for longer. Shares in Tokyo fell as the yen strengthened.
The weak reading out of Washington also lent support to high-yielding currencies, with the South Korean won sitting around one-year highs.
The Institute for Supply Management said its US non-manufacturing purchasing managers’ index had dived to its lowest level in more than six years. The reading follows figures showing a slowdown in jobs creation and factory activity.
Stephen Innes, senior trader at Oanda, said in a note: “The significance of the ISM services print cannot go understated as services account for more than 70 percent of the value of US GDP and will likely create jitters” over third-quarter economic growth.
The prospect of continued ultra-low borrowing costs in the world’s top economy was cheered on trading floors, sending the Nasdaq in New York to a record high while the Dow also rallied as investors returned from the Labor Day public holiday.
The upbeat mood filtered through to Asia, with Hong Kong up 0.1 percent—building on a four-day rally—while Shanghai put on 0.2 percent and Seoul 0.3 percent. Singapore, Taipei and Wellington also posted healthy gains.
Sydney edged up 0.1 percent after data showed the Australian economy expanded 3.3 percent on-year in April-June, broadly in line with forecasts and marking 25 years of unbroken growth.
However, Tokyo sank 0.7 percent by the break as the yen extended gains against the dollar following the US PMI reading.
The dollar bought 101.30 yen in Tokyo, down from 101.99 yen in New York and well off the 103.61yen in Asia earlier Tuesday.
After rallying last week on speculation of a rate hike this month, the data out of Washington has doused any of those hopes, analysts said, while a rise this year could now be in question.
“The trifecta of terrible ISM manufacturing and non-manufacturing PMIs and weaker-than-expected non-farm payrolls have left the quixotic calls for a September rate hike dead in the water,” Angus Nicholson, a market analyst in Melbourne at IG Ltd., said in an e-mail to clients.
“This is no longer a September story — for even a December rate hike to occur both … PMIs are going to have to stage quite a rapid recovery in the next month or so.”
The dollar was down one percent against the won, while Australia’s dollar added 0.4 percent, Indonesia’s rupiah climbed 0.3 percent and the Turkish lira was up 0.6 percent. There were also sharp gains in the Malaysian ringgit, and the Singapore and New Zealand dollars.
Oil prices enjoyed some boost from the weaker dollar, which makes the commodity cheaper for holders of other units. With AFP, Boomberg