Stock market dips as peso plummets to 51.54 a dollar

Stocks fell for a third day, dragging the benchmark index below the 8,300-point level as investors continued to take profit from the previous weeks’ record gains, while the peso tumbled to a new 11-year low.

The Philippine Stock Exchange index, the 30-company benchmark, tumbled 68 points, or 0.8 percent, to close at 8,279.92, as three of the six major sectors declined.

The heavier index, representing all shares, also slid 30 points, or 0.6 percent, to settle at 4,855.32, on a value turnover of P7.9 billion.  Losers outnumbered gainers, 113 to 80, while 50 issues were unchanged.

Eight of the 20 most active stocks ended in the green, led by PLDT Inc. which rose 2.1 percent to P1,740 and chemical company D&L Industries Inc. which gained 1.4 percent to P10.20. Robinsons Retail Holdings Inc. went up 1.1 percent to P93.

The peso declined 0.1 percent Tuesday to close at a new 11-year low of 51.54 against the US dollar, on value turnover of $551 million.   It was the local currency’s weakest finish since it settled at 51.60 against the greenback on Aug. 24, 2006.

Meanwhile, Tokyo’s Nikkei led another broad advance across Asian markets Tuesday, with the Nikkei chalking up its 16th straight gain to extend an impressive record streak.

The Japanese market pushed to fresh 21-year highs on the back of a weaker yen and hopes that Prime Minister Shinzo Abe’s weekend election landslide victory will usher in further measures to boost the world’s number three economy.

Equities had powered ahead on Friday on news that US senators passed a budget plan allowing them to introduce Donald Trump’s much-vaunted tax cuts with a simple majority vote instead of a 60-40 split.

However, there are fears that the recent surge will run out of steam and lead to a sell-off.

“These markets are tired, fatigued and need new information to fuel the beast,” Chris Weston, chief market strategist at IG in Melbourne, told Bloomberg News.

Tuesday’s rises in Asia came despite a retreat on Wall Street, where the Dow ended a five-day run of records ahead of a wave of corporate earnings releases including General Motors, McDonald’s and Amazon.

Tokyo ended up 0.5 percent to continue the best run of gains in its near 70-year history. Sydney gained 0.1 percent and Seoul ended marginally higher but Hong Kong was down 0.5 percent in afternoon trade.

Shanghai rose 0.2 percent after China’s twice-a-decade party congress ended, with President Xi Jinping cementing his power at the apex of the Communist Party.

Wellington, Taipei and Bangkok also eked out gains.

In early European trade, London fell 0.2 percent and Paris gave up 0.1 percent while Frankfurt was flat.

On currency markets the dollar was up against the yen while maintaining most of its latest gains on the pound and euro on hopes for Trump’s tax cuts.

Greg McKenna, chief market strategist at AxiTrader, said Trump had voiced support for a new top rate for the wealthy in order to help the middle class.

“This is important because it reconciles his views with those of House Speaker Paul Ryan who said last week that he didn’t want to see ‘a big drop in income tax rates for high-income people’,” said McKenna.

Traders are also keeping tabs on the president’s pick as Federal Reserve boss, with the choice said to be between a fiscal hawk and a dove. Incumbent Janet Yellen is said to be an outside bet to retain her post when it is up for renewal early next year.

Trump said he would make an announcement “very shortly, pretty shortly”.

The euro continues to struggle on uncertainty over Spain’s Catalan crisis, while the European Central Bank meets on Thursday with analysts expecting it to wind down its stimulus.With Bloomberg, AFP

Topics: stock market , Philippine Stock Exchange index , Peso , US Dollar
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