Stocks fell for a seventh day, dragging down the benchmark index to the 7,400-point level, following a Wall Street sell-off and amid speculation major central banks are moving closer to reining in stimulus.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 40 points, or 0.5 percent, to close at 7,404.80 Friday. The bellwether lost 3 percent this week but was still up 6.5 percent since the start of the year.
The heavier index, representing all shares, also shed 20 points, or 0.5 percent, to settle at 4,398.58, on a value turnover of P9.1 billion. Losers outnumbered gainers, 117 to 66, while 44 issues were unchanged.
Six of the 20 most active stocks ended in the green, led by JG Summit Holdings Inc., the investment company of tycoon John Gokongwei which rose 1.9 percent to P76 and cement maker Cemex Holdings Philippines Inc. which gained 1.8 percent to P11.42.
Conglomerate Aboitiz Equity Ventures Inc. rose 1.7 percent to P78, while food manufacturer Universal Robina Corp. advanced 0.9 percent to P182. Infrastructure conglomerate Metro Pacific Investments Corp. added 0.7 percent to close at P7.20, while GT Capital Holdings Inc. of tycoon George Ty rose 0.1 percent to P1,311.
Meanwhile, Japanese stocks were again boosted by a weaker yen as another feeble inflation reading put fresh pressure on Tokyo.
The dollar extended gains in Tokyo after breaking 105 yen Thursday on increasing expectations the Federal Reserve will lift interest rates by year’s end, helping Japan’s exporters.
Rate hike talk comes as analysts suggest years of cheap borrowing are nearing an end, a point reinforced by a surprise jump in British economic growth that shattered any chance of another Bank of England cut.
That has in turn put upward pressure on bond yields from the US to Australia as traders shift out of the ultra safe investments to seek better returns. Bond yields go up as prices go down.
“We are seeing a shift, with global central banks unlikely to provide additional stimulus and that’s driving bond yields higher and is strengthening the US dollar,” Niv Dagan, Melbourne-based executive director at Peak Asset Management LLC, told Bloomberg News.
The dollar’s gains were cemented Friday by news that Japanese consumer prices fell for a seventh straight month, which Michinori Naruse, an analyst at Japan Research Institute, told AFP meant “the Bank of Japan has no choice but to delay the deadline of the (two percent inflation) target”.
While the greenback dipped slightly against the pound and euro, it kicked on against most other higher-yielding Asia-Pacific currencies with the South Korean won 0.2 percent lower, Australia’s dollar 0.6 percent off and the Malaysian ringgit down 0.3 percent.
The weaker yen lifted the Nikkei, which ended 0.6 percent higher. But Shanghai closed down 0.3 percent while Hong Kong lost one percent in late trade.
Sydney fell 0.3 percent, Seoul shed 0.2 percent and Singapore was 0.5 percent lower. There were also losses in Jakarta and Bangkok.
Oil markets were subdued after Thursday’s bounce but worries over Iraq and Russia’s comments about being exempt from a planned output cut fed anxiety. With Bloomberg, AFP