Stock market, peso decline ahead of crucial US debt talks
STOCKS fell Monday ahead of US debt talks between President Joe Biden and congressional leaders, with both sides still apart but also confident a deal could be reached to avert a catastrophic default.
The PSE index, the 30-company gauge of the Philippine Stock Exchange, shed 43 points, or 0.66 percent, to close at 6,620.83, as five of the six subsectors retreated.
The broader all-shares index went down by 14 points, or 0.40 percent, to settle at 3,534.03 on a value turnover of P7 billion. Losers outnumbered gainers, 116 to 67, while 47 shares were unchanged.
Only two of the 10 most active stocks ended in the green. AgriNurture Inc. went up 1.23 percent to P7.38, while ACEN Corp. rose 0.98 percent to P6.21.
Meanwhile, the peso depreciated 0.27 percent to finish at 55.82 against the US dollar Monday from 55.67 Friday.
Asian markets mostly rose Monday. Sentiment was being supported by hopes the Federal Reserve will stand pat on interest rates at its next gathering, and Biden saying China-US relations should see a thaw “very shortly”.
After returning from the G7 summit in Japan, Biden will meet Republican House Speaker Kevin McCarthy at the White House, with a warning that the government could run out of cash as soon as June 1.
But while there is a broad expectation that an agreement will be found, Biden insisted he would not give in to demands for spending cuts, saying they were “frankly unacceptable”.
“It’s time for the other side to move from their extreme positions,” he said.
For his part, McCarthy said his position remained unchanged, tweeting: “Washington cannot continue to spend money we do not have at the expense of children and grandchildren.”
However, after speaking to Biden, he told reporters: “I believe it was a productive phone call.”
Still, the stalled talks caused last week’s rally in US stocks to stumble Friday.
Asia fared a little better Monday, though markets fluctuated as investors awaited solid signs of a compromise out of Washington.
Hong Kong and Shanghai rallied, with Tokyo hitting a new 33-year high.
Seoul, Singapore, Mumbai, Taipei, Jakarta and Bangkok were also up, though there were losses in Sydney and Wellington.
London rose in the morning but Paris and Frankfurt sank.