The local stocks and the peso started the week in the red as the discouraging second-quarter gross domestic product growth continued to dampen investors’ sentiments, while the new round of oil price hikes caused volatility in the foreign exchange.
The Philippine Stock Exchange index declined by 76.72 points, or 1.2 percent, to close at 6,329.19, while the broader all-shares index dropped 32.30 points to settle at 3,397.89.
Philstocks Financial Inc. research analyst Claire Alviar said the Pantheon Macroeconomics’ economic growth forecast downgrade to 4.5 percent from 5.5 percent weighed on sentiments.
The suspension of reclamation projects in Manila Bay area also affected the property sub-sector which shed 2.13 percent.
Meanwhile, the peso fell to 56.78 against the US dollar Monday from 56.32 Friday as investors sought the safety of the greenback on expectation of higher cost of importing crude and petroleum.
Meanwhile, Asian markets posted sharp losses in Monday trade, after falls in US tech stocks and as concerns over China’s property sector weighed on sentiment.
Leading the losers in Hong Kong —where shares were down nearly two percent—was developer Country Garden, after it missed bond payments and warned of multi-billion dollar losses, deepening concerns over the nation’s heavily indebted real estate sector.
Its shares were down more than 17 percent as of 3:00 pm (0700 GMT).
Country Garden is a privately owned real estate giant named in Forbes’ list of the 500 largest companies in the world. Its boss, Yang Huiyan, was until recently one of the richest women in Asia.
The firm has long been deemed financially solid but was unable last Monday to make two bond payments, and after a 30-day grace period the company risks defaulting in September if it still cannot pay.
Like its heavily indebted competitor Evergrande, any collapse of Country Garden would have catastrophic repercussions for the Chinese financial system and economy.
Fears for Chinese property companies were causing regional markets› gradual decline, Stephen Innes of SPI Asset Management wrote in a note.
«This negative sentiment has spread to other Asian markets, resulting in a generally subdued atmosphere across all exchanges,» he said.
Singapore dipped by more than one percent, and Tokyo closed down by a similar amount.
During the morning, the dollar was fetching 145.10 yen, its strongest level against the Japanese currency since November.
But the yen rebounded throughout the day, and was trading at 144.80 per dollar when the market closed, against 144.93 yen seen Friday in New York.
Shanghai and Manila were also down.
Stock markets had wavered on Friday after US data showed a bigger-than-expected rise in wholesale inflation, with traders weighing the likelihood of more interest rate hikes this year.
All eyes will be on the US retail sales report for July and the minutes of the July 26 Federal Open Market Committee meeting.
Wholesale prices in the United States picked up in July on a surge in services costs, according to government data released Friday.
The US markets ended the week mixed, with the tech-rich Nasdaq Composite Index falling 0.6 percent while the Dow Jones Industrial Average closed up 0.3 percent.
European stocks ended the trading week firmly in the red. With AFP