Stocks fell Monday, pulling down the benchmark index below the 8,400-point level for the first time in seven days, as investors awaited the release of third-quarter financial reports of listed companies.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 72 points, or 0.9 percent, to close at 8,348.32, as three of the six major sectors declined.
The heavier index, representing all shares, also fell 28 points, or 0.6 percent, to settle at 4,885.79, on a value turnover of P13.3 billion. Losers outnumbered gainers, 111 to 90, while 37 issues were unchanged.
Seven of the 20 most active stocks ended in the green, led by casino operator Melco Resorts which jumped 10.4 percent to P7.73 and Lopez Holdings Corp. which climbed 9.2 percent to P6.40.
Meanwhile, the dollar extended last week’s gains in Asian trade Monday on hopes for Donald Trump’s tax-cut plans, while Tokyo chalked up a record winning streak on a weak yen and following a big election win for Prime Minister Shinzo Abe.
US markets powered to all-time highs on Friday after senators voted for a federal budget plan that permits them to introduce the tax cuts with a simple majority vote instead of a 60-40 majority.
While there is a long way to go for the proposals to be implemented, the news provided a boost to already optimistic investors.
Expectations that Trump’s tax cuts and big spending plans would boost the economy helped drive a months-long global markets rally that began after his November election. However, a series of White House crises and legislative setbacks pared those gains.
Forex traders, betting the cuts will fan inflation and in turn lead to further US interest rate rises, briefly pushed the dollar above 114 yen on Monday for the first time since July.
“The budget clears a hurdle to the much anticipated Trump tax cuts, which in turn are expected to both improve the US economic and earnings outlook while at the same time strengthening hawks at the Fed’s hand to pursue at least four rate hikes in the next 14 months,” said Greg McKenna, chief market strategist at AxiTrader.
The greenback was also well up against most other currencies, with the euro struggling with the fallout from Spain’s Catalonia crisis after the national government imposed direct rule on the region following a controversial independence vote.
Adding to the yen’s weakness was Abe’s resounding victory in the weekend’s general election, which gives him a mandate to press on with his easy money, big-spending “Abenomics” program to kickstart the Japanese economy.
The Philippine peso also tumbled Monday to close at 51.51 against the dollar, near an 11-year low.
Tokyo’s traders welcomed the latest developments in Japan, sending the Nikkei surging 1.1 percent—a record 15th straight gain.
“The election outcome strengthens expectations for Bank of Japan Governor Haruhiko Kuroda’s reappointment or somebody with a similar stance being selected as next governor to extend the current unprecedented monetary easing,” Yuji Saito, executive director at Credit Agricole CIB’s FX department in Tokyo, told Bloomberg News.
However, Hong Kong stocks were down 0.5 percent in the afternoon and Sydney lost 0.2 percent.
Seoul barely moved but Shanghai ended up 0.1 percent and Singapore also gained 0.1 percent in late trade. Taipei and Jakarta were also up.
In early European trade London slipped 0.1 percent, while Paris and Frankfurt were both marginally higher. With AFP, Bloomberg