The stock market plunged again Friday along with the rest of Asia on the prospect of higher US interest rates, with dealers betting Donald Trump’s planned huge spending policies will fire inflation.
The peso, meanwhile, retreated further to a more than seven-year low against the greenback Friday and nearly breached the 49-a-dollar territory two days after Republican Party bet Donald Trump won the US presidential election Wednesday.
The Philippine Stock Exchange Index lost 206.78 points, or 2.9 percent, to 6,975.09 on a value turnover of P9.5 billion. The index dropped below 7,000 points for the first time since May 6, 2016, three days before the May 9 presidential election when it closed at 6,991.87.
Losers overwhelmed gainers, 152 to 28, with 45 issues unchanged.
Conglomerate Ayala Corp. sank 6.2 percent to P750, while GT Capital Holdings Inc. of tycoon George Ty tumbled 5.4 percent to P1,263.
Globe Telecom Inc., the second biggest telecommunications company, slumped 5.2 percent to P1,490, while Aboitiz Equity Ventures Inc. skidded 4.4 percent to P72.55.
The peso lost P0.29 to close at 48.95 from 48.66 Thursday. It was the peso’s weakest level in more than seven years since the 48.995 on April 28, 2009, the year of the global financial crisis. Total volume turnover reached $707.5 million, significantly higher than the $357 million previously.
“USD/PHP was pummeled into submission, soaring higher as the dollar continued to lord it over emerging market currencies. Foreign investors were also heading for the exits as fast as they could, pulling down the peso after the PSEi broke through the 7,000 handle,” Nicholas Antonio Mapa of the Bank of the Philippine Islands said in a statement.
“This was the weakest level of the peso seen since April 28, 2009 when USD/PHP closed at 48.995,” Mapa added.
On equities markets, skittish investors sent Hong Kong 1.1 percent lower and Seoul 0.9 percent down, while emerging market shares were battered.
Taipei dived 2.1 percent while Jakarta was down almost three percent.
But Japan’s Nikkei ended up 0.2 percent as the weaker yen boosted exporters, although it was down from earlier highs, while Shanghai and Sydney both put on 0.8 percent.
The dollar soared against high-yielding currencies Friday. Despite an all-time high close on Wall Street, investors across Asia turned cautious on uncertainties linked to a Trump presidency, while the Mexican peso fell back towards record lows on worries about the firebrand tycoon’s anti-Mexico stance.
After an initial shock, global equities rocketed on news Trump had beaten Hillary Clinton, with investors hoping for business-friendly policies and measures to boost the US economy, a key driver of world growth.
However, there are worries about his plans after saying he will tear up several trade deals while ramping up import duties which would stoke inflation.
And expectations that Trump’s plans for huge spending projects will also fan prices have lit a fire under the dollar as dealers bet the Federal Reserve will hike borrowing costs more aggressively to cap inflation.