Stocks fell amid thin trading Monday in line with the movement of Asian markets, as investors grew cautious before speeches this week from US President Donald Trump and Federal Reserve chair Janet Yellen.
The Philippine Stock Exchange index, the 30-company benchmark, shed 26 points, or 0.4 percent, to close at 7,232.47, as three of the six sectoral indices declined. Mining and oil stocks advanced, as metal prices climbed.
The heavier index, representing all shares, also dropped 10 points, or 0.2 percent, to settle at 4,384.35, on a value turnover of P4.4 billion. Losers outnumbered gainers, 103 to 84, while 54 issues were unchanged.
Ten of the 20 most active stocks ended in the green, led by Arthaland Corp. which surged 13.7 percent to P1.33, after announcing a partnership with China Railway Dongfang Group and Knusford Berhad for a $166-million office project in Cebu.
Technology company Xurpas Inc. gained 5.8 percent to P8.46, while Semirara Mining and Power Corp. rose 1.1 percent to P142.50.
Meanwhile, Asian markets kicked the week off with losses Monday, with Tokyo hit by a stronger yen, as the global Trump rally shows signs of fragility ahead of a key speech by the new president to Congress.
A record 11th successive all-time high close for New York’s Dow was not enough to inspire investors who are growing worried the recent buying—fueled by expectations Donald Trump will introduce economy-boosting measures—may have run too far.
Treasury Secretary Steven Mnuchin’s warning that growth might not hit the four percent Trump promised, as well as uncertainty around the new president’s plans to slash taxes and spend big on infrastructure, sent the dollar tumbling Friday.
And it struggled again on Monday, sitting at around 112 yen—levels not seen since the end of November and more than five percent down from highs touched at the start of the year.
The greenback was also lower against the euro but climbed against the pound after Britain’s Sunday Times reported Prime Minister Theresa May was preparing for Scotland’s leaders to call for another independence referendum following last year’s Brexit vote. The majority of Scots voted to remain in the European Union.
The sharp advance in the yen hit Japan’s exporters, sending the Nikkei 0.9 percent down, while Hong Kong lost 0.4 percent, Sydney sank 0.3 percent and Seoul was 0.4 percent lower. Singapore gave up 0.4 percent.
Shanghai shed 0.8 percent. China’s top securities regulator on Sunday pledged to speed up approvals of initial public offerings, as the government seeks to attract capital and encourage domestic growth.
“This week it’s really about President Trump, his address to a joint sitting of Congress and his tax plan,” Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, said in a note.
“I get a sense traders want to believe in him—hence the stocks rally—but gold up and rates down suggest there is some fraying at the edges of market ebullience.”
Markets are hoping the speech on Tuesday will provide more details about Trump’s tax pledge, which he said this month would be “phenomenal”.
“Investors are now worried Trump’s ‘phenomenal’ tax plan won’t be something that beats market expectations,” Shinichi Yamamoto, a senior strategist at Okasan Securities, told Bloomberg News. With AFP, Bloomberg