Stocks closed flat Thursday, in line with the movement of regional markets, after the US Federal Reserve showed resolve to continue tightening its monetary policy.
The Philippine Stock Exchange index, the 30-company benchmark, lost 1 point to close at 7,964.49, as three of the six major sectors declined.
The heavier index, representing all shares, also lost 1 point to settle at 4,727.56, on a value turnover of P8 billion. Losers outnumbered gainers, 96 to 90, while 58 issues were unchanged.
Nine of the 20 most active stocks ended in the green, led by Wilcon Depot Inc. which climbed 3.4 percent to P6.69 and developer Megaworld Corp. which went up 2.9 percent to P4.55. Puregold Price Club Inc. gained 2.2 percent to P45.80.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the latest move by the US Fed to raise interest rates for the second time this year would be good for the global economy, including emerging market economies such as the Philippines.
The Fed raised its benchmark interest rate by a full percentage point over the last two years, after leaving the rate close to zero from late 2008 to late 2015.
“The Fed’s action was broadly anticipated by the market and reflects the positive outlook of the Fed on the US economy and labor conditions. It also laid plans for shrinking its balance sheet, which gives the market another glimpse on the normalization process,” Tetangco said in a text message.
“In medium term, the positive outlook on US economy should be good for global economy including emerging market economies,” Tetangco said.
Meanwhile, Asian markets mostly sank Thursday with energy firms swiped by a dive in oil prices, while traders were also spooked by a report that President Donald Trump was being investigated for possible obstruction of justice.
Crude tanked three percent on data Wednesday showing a smaller-than-forecast drop in US stockpiles and an International Energy Agency warning that global output will increase faster than demand next year as US production ramps up.
The news followed the OPEC cartel’s warning that higher US output was hurting its drive to address a long-running supply glut, which has hammered the oil market. Both main contracts barely moved in Asian trade.
“Energy stocks will have a tough day at the office, with oil getting smashed 3.5 percent on higher gasoline inventory and we see US crude trading into the May lows now,” Chris Weston, Australia-based chief market strategist at IG Markets, said.
Hong Kong-listed CNOOC sank 1.6 percent and PetroChina was 1.2 percent off while in Sydney Woodside Petroleum shed 1.7 percent and Rio Tinto was down 3.7 percent. Inpex lost 0.8 percent in Tokyo.
The losses hurt broader stock markets, with Tokyo down 0.3 percent, Sydney losing 1.2 percent, Seoul off 0.5 percent and Singapore slipping 0.5 percent.
But Shanghai closed 0.1 percent up.
Hong Kong retreated 0.9 percent in the afternoon, with property firms also suffering hefty selling after the Federal Reserve lifted interest rates and signaled further tightening measures in the future. The city’s de facto central bank followed the Fed’s rate hike on Thursday, owing to a monetary policy link to the US.
Markets were given a jolt by a Washington Post story saying top intelligence officials would be questioned over allegations Trump tried to get the FBI to back away from a probe into former national security adviser Michael Flynn.
The news comes as special prosecutor Robert Mueller looks into allegations of collusion between Trump’s campaign and Russia to sway the outcome of last year’s presidential election.
The report added to concerns the tycoon’s planned big-spending, tax-cutting, deregulating agenda — which helped fuel a months-long global rally from November — could founder.
Traders were sent scurrying last month when sacked FBI chief James Comey also said Trump had urged him to lay off Flynn. The White House has denied all the claims.
The crisis engulfing the president, and the uncertainty that has brought, has kept investors on edge for months. With Bloomberg, AFP