Stocks fell Friday on mild profit taking and signs that the global recovery is losing steam.
The Philippine Stock Exchange Index slipped 29.28 points, or 0.4 percent, to 6,923.60 on a value turnover of nearly P22 billion. Gainers, however, beat losers, 103 to 86, with 53 issues unchanged.
PLDT Inc., the biggest telecommunications firm, dropped 2.4 percent to P1,640, while major property developer Ayala Land Inc. declined 2.5 percent to P32.65.
MREIT Inc., the newly-listed real estate investment trust company of Megaworld Corp., the biggest lessor of office spaces, rose 3.7 percent to P16.70 on its market debut, while AC Energy Corp. of the Ayala Group climbed 3 percent to P11.62.
Meanwhile, the Asian markets sank Friday as investors tracked another hefty sell-off on Wall Street, concerned about the prospect of higher borrowing costs and a possible US debt default.
While the fourth quarter is generally considered a strong period for traders, it has started in much the same fashion as the previous one ended, with uncertainty replacing optimism that the worst of the pandemic is over.
All three main indexes on Wall Street ended in the red on Thursday, with the S&P shedding more than four percent in September.
And Asia followed suit.
Tokyo fell more than two percent as investors brushed off the closely watched Tankan business survey showing confidence among major Japanese manufacturers had improved for the fifth consecutive quarter.
Sydney lost more than two percent despite news that Australia will begin to reopen its borders in November after 18 months of restrictions.
Seoul, Singapore, Taipei, Mumbai and Jakarta also fell, though Wellington was flat.
Hong Kong and mainland Chinese markets were closed for a holiday.
News that US lawmakers had finally passed legislation to avert a costly government shutdown did little to allay concerns about the fact that they are unable to agree a deal to raise the debt limit.
Top officials including Treasury Secretary Janet Yellen and Federal Reserve boss Jerome Powell have warned that failure to do so before the cash runs out in mid-October would leave the country unable to pay its bills and default, leading to an economic catastrophe.
At the same time, Democrats continue to bicker among themselves over Joe Biden’s multi-trillion-dollar infrastructure and social spending bills, which will still face a tough passage through Congress.
Investors are also preparing for the Fed to start tapering its massive bond-buying program before the end of the year.
The move will bring an end to the massive financial support put in place at the start of the pandemic that has been a key driver of the global economic and equity recovery. Observers are speculating a hike in interest rates could then come before the end of 2023.
The bank’s monetary tightening—which is being mirrored in other economies—comes as it looks to temper a sharp spike in inflation fueled by the worldwide reopening, supply chain bottlenecks and surging commodity prices. With AFP