Stocks tumbled Friday on profit-taking, trailing losses on Wall Street as investors awaited the release of US employment data.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, lost 245 points, or 3.6 percent, to close at 6,489.65 Friday as all six subsectors declined.
The broader all-share index also went down 81 points, or 2.3 percent, to settle at 3,419.65 on a value turnover of P6.3 billion. Losers outnumbered gainers, 108 to 75, while 56 issues were unchanged.
All 10 most active stocks ended in the red, with SM Investments Corp. falling 8 percent to P901.50 and Bank of the Philippine Islands retreating 4.8 percent to P99.00.
Meanwhile, the peso climbed 0.48 percent Friday to close at 55.74 against the US dollar Friday, the highest in more than three months, from 56.22 on Thursday. Despite the local currency’s more than 2 percent gain this week, it was still down 9.32 percent this year.
The US dollar struggled to recover Friday from its recent sell-off as traders grew confident the Federal Reserve will slow its pace of interest rate hikes, while a recent equities rally sputtered as focus turns to key US jobs data.
Rizal Commercial Banking Corp. chief economist Michael Ricafort earlier said the US dollar continued to soften versus major global currencies amid mostly softer US economic data that could support moderate future Fed rate hikes.
“The peso [is] also stronger after the latest signals from Federal Reserve Chairman Jerome Powell of a possible moderate/smaller Fed rate hike in December 2022,” he said.
Another positive inflation data release out of the United States added to expectations that the US central bank will take a lighter approach to lifting borrowing costs at its December meeting.
The personal consumption expenditures price index data came a day after Fed boss Jerome Powell indicated that the days of 75 percentage-point rate increases were gone as officials pore over the impact of tightening on the economy.
A report showing factory activity shrinking in November added to the sense that the Fed moves were kicking in.
The developments gave forex traders another reason to shift out of the dollar, pushing it down against its major peers—having surged this year on the back of hawkish Fed policy.
The greenback was under particular pressure from the yen Thursday, having hit a three-decade high in October, while sterling and the yuan were also well up from the record lows touched recently.
The US unit was unable to break higher on Friday.
However, several Fed officials including Powell have lined up to warn that rates will continue to rise and stay elevated, with the possibility of no cut until 2024.
While the mood on trading floors has become much lighter, equity investors took a step back from their latest buying spree as they awaited the release of the closely watched non-farm payrolls report later Friday.
The figures will provide the most recent snapshot of how the world’s top economy is faring in light of the higher rates and four-decade-high inflation.
“Stocks are grinding a touch lower in Asia after a directionless US session, which sees local traders book some profits ahead of the non-farm payroll report,” said SPI Asset Management’s Stephen Innes.
“A strong report could still reinforce the Fed’s hawkish ambitions. So traders are jockeying for position ahead of the moderately high-risk event.”
Hong Kong, Shanghai, Tokyo, Sydney, Seoul, Mumbai, Bangkok, Singapore, Taipei, Wellington, Manila and Jakarta all fell.
Investors were following developments in China amid signs it is edging towards a pivot from its draconian COVID-zero strategy, which has seen the lockdown of tens of millions and strangled the giant economy this year.
The move came after widespread protests across the country earlier in the week against almost three years of heavy-handed containment measures and calls for more political freedoms, which have rattled the leadership of Xi Jinping.
Observers say they expect officials to signal a shift in priorities at a key meeting later this month, with a focus turning to kickstarting the economy, though with vaccination rates low the move will likely be gradual.
“The language [at the meeting] will prioritize economic growth more than it did the last couple of years,” Arthur Budaghyan, at BCA Research Inc. said. With Julito G. Rada and AFP