The stock market retreated Thursday following a slump in the oil price driven by fresh indications of oversupply.
The Philippine Stock Exchange Index dropped 70.05 points, or 0.9 percent, to 7,981.35 on a value turnover of P17.6 billion. Losers beat gainers, 137 to 61, with 39 issues unchanged.
GT Capital Holdings Inc. of tycoon George Ty sank 4.1 percent to P1,554, while PLDT Inc., the biggest telecomunications firm, lost 4 percent to P1,830.
Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, and hospitals declined 3.3 percent to P7.23. Megaworld Corp., the largest lessor of office spaces, fell 5.5 percent to P5.17.
The dollar, meanwhile, rose against some Asia Pacific currencies but gains were capped as traders are still awaiting clearer signals on the timing of a possible US interest rate hike, with expectations that the Fed will move cautiously.
The New Zealand dollar bucked the trend, rising against the greenback after the country’s central bank slashed interest rates to a record low of 2.0 percent and said further easing might be necessary.
South Korea on Thursday opted to keep its key rate unchanged at 1.25 percent for August but the central bank governor held out the prospect of another reduction.
Japanese financial markets were closed for a national holiday.
“The biggest risk to the market at the moment is a huge drop in oil prices,” James Woods, a strategist at Rivkin Securities in Sydney, told Bloomberg news.
Oil prices have been fluctuating since entering a “bear” market last week, falling more than 20 percent from recent highs above the $50 a barrel seen in early June and closing below $40 a barrel for the first time since April.
Shanghai fell 0.5 percent dragged down by falls in smaller companies.
Sydney ended down 0.6 percent, while Taipei tumbled 0.8 percent.
Wellington was flat after the rate reduction which was in line with market expectations.
Seoul rose while Hong Kong stocks also gained 0.4 percent, spurred by financial companies.
Weekly figures released Wednesday by the US Energy Department showed that crude stocks remained high last week at 523.6 million barrels, up 0.2 percent from the prior week and still more than 15 percent above the same point last year.
At about 0830 GMT, West Texas Intermediate was trading at $41.25 while Brent was at $43.68.
“Oil is increasingly pulling back towards the US$40 a barrel level again and many in the markets are concerned that the shorts may even be looking for prices to drop down towards the $35 level,” Angus Nicholson, a strategist at IG Markets, said in a note. With AFP
