The stock market retreated Wednesday on profit taking following a hefty sell-off on Wall Street overnight.
The Philippine Stock Exchange Index declined 82.42 points, or 1.1 percent, to 7,261.54 on a value turnover of 5.3 billion. Losers beat gainers, 103 to 75, with 50 issues unchanged.
Security Bank Corp., the eighth biggest lender in terms of assets, fell 4.5 percent to P107, while International Container Terminal Services Inc., the largest port operator and owned by tycoon Enrique Razon Jr., dropped 3.3 percent to P204.40.
Major property developer Ayala Land Inc. of the Ayala Group declined 2.6 percent to P35, but Aboitiz Power Corp. of the Aboitiz Group rose 5.5 percent to P33.55.
Meanwhile, growing fears about the US Federal Reserve’s plans to fight surging inflation by ramping up interest rates hit Asian markets again Wednesday, while oil prices extended their rally after a blast at a key pipeline.
A rise in prices since early 2021 has forced central banks around the world to start winding back the colossal financial support put in place at the start of the pandemic, with many warning that failure to act could see them run out of control.
The stock market losses in New York continued in most of Asia on Wednesday.
Tokyo shed 2.8 percent, compounded by steep falls in market heavyweights Sony and Toyota.
Sony collapsed almost 13 percent—its biggest drop since 2008—on news that rival Microsoft would pay $69 billion for US gaming giant Activision Blizzard, betting big on the sector.
Toyota dived five percent after warning that it expected to miss its production target for this fiscal year.
Sydney, Seoul, Singapore, Wellington, Taipei and Jakarta were also in retreat.
However, Hong Kong edged up by the end following remarks from the Chinese central bank hinting it would unveil fresh economy-supporting measures, having cut interest rates on Monday for the first time since the start of the pandemic.
Shanghai closed in negative territory.
Finance chiefs in several countries—including at the Bank of England—have already put the wheels in motion, but the main focus is on the Fed—the central bank of the world’s biggest economy—which has so far refrained from lifting rates, until now.
Officials are currently reining in their massive bond-buying program and aim to hike borrowing costs in March.
But while Fed boss Jerome Powell has said the policy board will be careful in its approach and mindful not to jeopardize the economic recovery, there is a worry it will have to be more aggressive than initially thought to bring inflation down from four-decade highs.
Some commentators are predicting a 50 basis-point rise in March—which would be the first that big since 2000—having initially estimated 25 points.
Expectations for a quick run-up in costs has sent Treasury yields rocketing and caused near-panic on equity markets, with all three main indexes on Wall Street deep in the red so far this year, having hit multiple records in 2021.
US Treasury yields were pushing closer towards two percent and on Wednesday, German Bund yields passed into positive territory for the first time since May 2019. With AFP