Stocks fell for a third day despite the release of strong third-quarter gross domestic product growth and positive corporate earnings as the local market tracked the slump in US and Asian equities amid uncertainty on American midterm election results.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, tumbled 74 points, or 1.2 percent, to close at 6,167.57 Thursday as three of the six subsectors ended in the red.
The broader all-share index also went down 15 points, or 0.5 percent, to settle at 3,277.66 on a value turnover of P4.6 billion. Losers outnumbered gainers, 106 to 66, while 44 shares were unchanged.
Six of the 10 most active stocks ended in the green, led by Converge ICT Inc. which climbed 8.1 percent to P12.00 and SM Prime Holdings Inc. which rose 1.8 percent to P33.90.
Meanwhile, Asian stocks fell on Thursday after inconclusive US midterm election results and a cryptocurrency market in shambles left Wall Street and European markets in a sea of red.
The uncertainty, especially about how the midterm results would impact inflation, transferred to Asia overnight.
Tokyo ended down one percent and Shanghai also closed lower. Hong Kong, Seoul, Sydney, Jakarta and Taipei were all trading down.
“A purple dilemma might be the best way to describe the red-blue tangle that emerged Wednesday. It’ll be gridlock, that’s for sure,” Stephen Innes of SPI Asset Management said of the US midterms.
“Perhaps not the friendliest kind for market participants, many of whom were hoping for a more resounding rebuke of Democrats given inflation realities.”
All eyes are expected to turn to US inflation data, due later Thursday, to gauge the speed of future rate hikes by the Federal Reserve.
“US growth looks still too strong to bring inflation down,” Tapas Strickland of National Australia Bank said in a note.
“The ongoing resilience in the (consumer prices) data and stickiness in inflation continue to point to the Fed hiking rates closer to 5.0 percent or higher.”
Fed officials have raised their policy rate to a range of between 3.75 to 4.0 percent.
‘Crypto tumult’
Markets in Asia were already grappling with the impact of strict zero-Covid measures in China, with supply chains and activity slowed by harsh lockdowns and testing policies.
“China’s domestic demand is weak and their key trading partners are entering recession territory,” said Edward Moya from Oanda.
“China is also continuing to struggle with COVID as Guangzhou has to return to mass testing.”
The crypto world was also rocked by a surprise decision from Binance, the world’s biggest cryptocurrency platform, to scrap a possible acquisition of rival FTX.com a day after disclosing it had signed a non-binding letter of intent to buy it.
The near-collapse of FTX has plunged bitcoin to a two-year low.
“FTX’s slump from over a $32 billion valuation to zero in less than a few days raises numerous issues,” said Stephen Innes.
“This is far from fringe buyers taking a hit on the back of support from stimulus-check and crypto enthusiasts. Prominent investors are wearing eggs on their faces after diving in head first.”
He added that gold and silver will be the biggest beneficiaries of the crypto fallout with investors looking to the trusted precious metals for stability. With AFP