Stocks fell for a third day, as caution crept into financial markets ahead of US President Donald Trump’s address to Congress.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 20 points, or 0.3 percent, to close at 7,212.09 Tuesday. Of the six sectoral indices, only holding firms and services posted gains.
The heavier index, representing all shares, declined 15 points, or 0.4 percent, to settle at 4,368.38, on a value turnover of P7.1 billion. Losers outnumbered gainers, 116 to 62, while 56 issues were unchanged.
Six of the 20 most active stocks advanced, led by PLDT Inc. which climbed 4.3 percent to P1,460 and conglomerate JG Summit Holdings Inc. which went up 2.8 percent to P77.70. Globe Telecom Inc. rose 1.6 percent to P1,828.
Meanwhile, Asian markets mostly gave up early gains Tuesday and the dollar came under fresh selling pressure as trading floors became cautious ahead of Donald Trump’s speech to a joint session of Congress.
The new US president hinted he would make a “big” announcement on infrastructure policy, raising hopes he will deliver on a key campaign promise.
Traders will also be looking for detail on tax reform—another major pledge—which this month he said would be “phenomenal”.
Global markets and the dollar have surged since Trump’s election win in November on expectations his planned measures will fire the US economy and fuel inflation, forcing the Federal Reserve to lift interest rates.
But with the Dow on Monday hitting a record high for a 12th successive day, analysts say there is a worry the advance may have gone too far and investors are beginning to row back, with the also dollar feeling the pinch.
“President Trump’s big address naturally has attracted a lot of anticipation in markets. There is a strong chance that it could be the catalyst for the next leg higher for the US dollar, bonds and stocks,” Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, said in a note.
“But there is also room for disappointment.”
The dollar got a shot in the arm Monday when the head of the Dallas Fed Robert Kaplan said he thought borrowing costs should be lifted “sooner rather than later”.
His comments fueled speculation the Fed could hike as soon as next month and come days before the central bank’s head, Janet Yellen, and her deputy Stanley Fischer are due to talk.
The greenback’s improvement from Monday’s levels around 112 yen provided support to Japan’s exporters in the morning but the positive energy for the dollar seeped away through the day and the Nikkei ended only marginally higher, having been up almost one percent at one point.
Adding to the sense of concern, Japan logged its first fall in factory output for six months, highlighting the struggle the country’s leaders face in trying to turn around the world’s number three economy.
Hong Kong fell 0.6 percent in the afternoon, having already fallen for three days straight, while Sydney shed 0.2 percent and Singapore was off 0.3 percent. Manila and Kuala Lumpur also retreated. But Shanghai rose 0.4 percent.
Seoul closed 0.3 percent higher, with market heavyweight Samsung Electronics jumping more than one percent despite news that the heir to the South Korean giant and four other top executives had been indicted on multiple charges including bribery and embezzlement. With AFP, Bloomberg