Stocks fall further on geopolitical concerns, BoJ

THE LOCAL MARKET fell further on Tuesday after the Bank of Japan (BoJ) decided to hold monetary policy steady and as geopolitical concerns overseas weighed on the main index.

The bellwether Philippine Stock Exchange index fell 0.82% or 55.47 points to close at 6,658.66 on Tuesday.

The all-shares index dropped 0.65% or 26.80 points to 4,072.85.

“The PSEi closed lower after the Bank of Japan kept monetary policy unchanged at its December meeting. Investors may have been a little bit wary over the possibility of the BoJ revising up its 0% target on 10-year bond yields, aligning its steps with a global surge in yields,” Luis A. Limlingan, managing director at Regina Capital Development Corp. said in a mobile message.

The yen edged down on Tuesday after the Bank of Japan held policy steady, shedding some gains made following killings in Germany and Turkey, while regional stocks were mixed after Federal Reserve Chair Janet Yellen’s upbeat comments.

The BoJ maintained shortterm rates at - 0.10% and the 10-year government bond yield around 0%, while offering a more upbeat view of the economy than in its Nov. 1 assessment.

This comes on the heels of the Federal Reserve decision next week, putting Asian markets in mixed sentiments.

MSCI’s broadest index of AsiaPacific shares outside Japan shed earlier gains to trade down 0.20%.

Mr. Limlingan also cited as contributors to the negative sentiment recent fatal incidents such as the attack against a Russian diplomat, shoppers at a German Christmas market, and the Berlin truck crash.

Sectoral indices were mostly down yesterday.

Services plunged 1.82% or 23.37 points to 1,257.79; holding firms slumped 1.63% or 112.70 points to 6,792.97; mining and oil went down 0.57% or 69.75 points to 11,968.40; industrial fell 0.24% or 25.40 points to 10,557.32; and financials inched down 0.06% or 1.02 points to close the session at 1,619.72.

Only the property sector closed in the green as it went up 0.17% or 5.31 points to 2,986.28.

Value turnover went up to P6.78 billion yesterday as 1.82 billion shares changed hands, from the P5.79 billion worth traded on Monday.

Decliners continued to outnumber advancers, 132 to 51, while 42 names ended unchanged.

Foreign selling persisted, with net outflows growing to P1.37 billion on Tuesday from the P896.77 million seen the previous session.

Most Southeast Asian stock markets also fell on Tuesday after US Federal Reserve Chair Janet Yellen gave an upbeat view of the jobs market, strengthening the rate hike outlook for next year.

Ms. Yellen said on Monday that the US labor market had improved to its strongest in nearly a decade, suggesting that wage growth was picking up and underscoring expectations that the central bank would continue to raise interest rates next year.