Stocks fell for a second day, as investors began to worry over the government’s decision to cancel mining contracts.
The Philippine Stock Exchange index, the 30-company benchmark, shed 32 points, or 0.5 percent, to close at 7,174.30 Wednesday, as five of the six sectoral indices declined.
The heavier index, representing all shares, dropped 18 points, or 0.4 percent, to settle at 4,356.25, on a value turnover of P8 billion. Losers outnumbered gainers, 108 to 87, while 47 issues were unchanged.
Six of the 20 most active issues ended in the green, led by Megawide Construction Corp. which climbed 4.1 percent to P15.60 and port operator International Container Terminal Services Inc. which advanced 2.8 percent to P76.50. Property developer Ayala Land Inc. rose 1.1 percent to P36.
Mining stocks were volatile, after Environment Secretary Regina Lopez ordered the closure of 23 mines and the suspension of five others. She also threatened to cancel mining contracts with foreign and local investors.
Meanwhile, most Asian markets resumed their rally on Wednesday as traders cheered upbeat remarks on the US economy by Federal Reserve boss Janet Yellen and her suggestion interest rates could rise next month.
Wall Street ploughed to record highs for a fourth succession day as Yellen reinforced the view that the world’s top economy was in rude health, with the jobs market improving and inflation heading to the Fed’s two percent target.
She confirmed the next rate hike could come at any time, which leaves open the possibility of a mov at the Fed’s March 14 to 15 policy meeting.
Her remarks, in the first of two days of testimony to Congress, helped drag US markets out of a morning slumber and reinvigorated the greenback against most of its peers.
“The US dollar was on the backfoot during the Asian trade [Tuesday], but it got that boost from Yellen, so it will be on a stronger position [Wednesday],” Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
“She said rates need to rise. That’s important because to wait is to risk having to overreact and then knock the economy – and markets – for six.”
In early Tokyo exchanges the dollar was at 114.40 yen from 114.27 yen in New York and well up from the 113.40 yen earlier in Asia. The pound and euro was also sharply down from their levels in Asia Tuesday.
Higher-risk currencies retreated, with Australia’s dollar, the South Korean won, Malaysian ringgit and New Zealand dollar all well down.
Asian equity markets tracked the US surge. Tokyo shot up 1.2 percent by the break as the weaker yen helped exporters, while Hong Kong added one percent and Shanghai gained 0.2 percent.
Sydney pushed one percent higher, Seoul gained 0.3 percent and Singapore was up 0.6 percent. Wellington and Taipei also advanced.
The gains extend a rally that began last week when President Donald Trump promised details of “phenomenal” tax reforms, which raised hopes he will also follow through with other election promises of massive infrastructure spending and deregulation.
“In principle, the Trump rally continues,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities
“Yellen seemed so positive” towards hiking interest rates, he told AFP.
The big gains in Tokyo’s Nikkei came despite another sell-off in troubled conglomerate Toshiba, which plunged more than 13 percent at one point after warning it faced a 390 billion yen loss in the fiscal year to March, hit by a 700 billion yen writedown at its US nuclear unit Westinghouse.
The news prompted its chairman to resign while it also hinted at another accounting scandal following a profit-padding crisis in 2015. With AFP, Bloomberg