Market drops; LT Group rises
Stocks fell for a sixth day, as investors were spooked by the prospect of higher borrowing costs in the world’s top economy.
The Philippine Stock Exchange index, the 30-company benchmark, shed 7 points, or 0.1 percent, to close at 7,787.37 Wednesday. Despite the loss, the bellwether was still up 12 percent this year.
The heavier index, representing all shares, also lost 2 points to settle at 4,633.88, on a value turnover of P13.2 billion. Losers outnumbered gainers, 100 to 82, while 52 issues were unchanged.
Five of the 20 most active stocks ended in the green, led by LT Group Inc. which climbed 3.9 percent to P17.14 and Manila Water Co. Inc. which gained 3.7 percent to P28. Security Bank Corp. added 1.1 percent to close at P217.
Meanwhile, most Asian stocks also traded lower Wednesday. Dollar demand has intensified since Federal Reserve boss Janet Yellen on Friday hinted at a possible hike as data point to continued economic improvement.
Figures showing US consumer confidence at its highest level in almost a year provided further evidence of a brighter outlook. On Tuesday, the Fed’s vice chairman Stanley Fischer told Bloomberg TV that any movement in rates was dependent on data, adding that “employment is very close to full employment”.
Focus is now on Friday’s key jobs creation report, which could be pivotal in the Fed’s decision-making ahead of next month’s policy meeting, although there are some reservations about whether a move will be made then.
“The Fed’s more upbeat mood and a summer of record highs on Wall Street have boosted the US dollar’s yield appeal,” Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney, told Bloomberg News.
“Payrolls is certainly very important, though there are strong indications that seasonal factors will ensure the headline reading will not provide the Fed with the slam dunk it needs for a September hike.”
The softness in the yen once again helped Japan’s exporters and the Nikkei ended one percent higher, while Shanghai also edged up.
However, Hong Kong fell 0.3 percent in the afternoon, while Sydney closed down 0.8 percent and Seoul was 0.3 percent down while Singapore, Taipei and Manila all sank.
In early European trade London and Paris each dipped 0.1 percent and Frankfurt lost 0.3 percent.
The stronger dollar also hit oil prices, with West Texas Intermediate down 0.1 percent at $46.29 and Brent also 0.1 percent off at $48.30.
Both contracts tumbled Tuesday after the oil minister for key producer Iran reportedly said the country planned to ramp up output.
The comments come as the OPEC producer cartel—of which Iran is a member—and Russia prepare for a meeting next month aimed at addressing a global supply glut that has hammered prices. With AFP, Bloomberg
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