Both the peso and Philippine stocks fell Wednesday as investors reacted to the initial results of the US presidential elections.
The Philippine Stock Exchange index lost 1.27 percent to 7,165.42, as investors traded cautiously while monitoring the US elections, Philstocks Financial Inc research head Japhet Tantiangco said.
The broader all-shares index also declined 0.59 percent to 3,969.97.
“Investors are pricing in the possibility of a Trump presidency which is known to be heavily leaning towards protectionist policies that may have negative implications on the global economy,” Tantiangco said.
“This is as early counts show Mr. Donald Trump taking the lead. The market was also weighed by the weakening of the local currency,” he said.
Trading was tepid, with net value turnover posting P4.41 billion, below the year-to-date average of P5.16 billion.
Foreigners were net sellers, with net outflows amounting to P1.12 billion.
All sectors were in the negative territory with the properties losing the most, down by 2.94 percent. Decliners edged advancers 113 to 86.
Century Pacific Food Inc. was the top index gainer, climbing 1.94 percent to P4, while Ayala Land, Inc. was the main index laggard, falling 4.35 percent to P33.00.
Meanwhile, the peso closed at 58.66 against the US dollar Wednesday, down from 58.31 Tuesday. The dollar surged and bitcoin hit a record high Wednesday before Donald Trump claimed victory in the US election, with traders ramping up bets on fresh tax cuts, tariffs, and rising inflation.
While polls had shown the race on a knife edge, the Republican fared far better than his Democratic opponent Vice President Kamala Harris as results rolled in. Both candidates picked up expected wins in safe states, but indications that the business tycoon was on course for a second term boosted the so-called Trump Trade.
While victory is not yet official, Trump claimed it in a speech in Florida, saying: “We are going to help our country heal… We have a country that needs help and it needs help very badly.”
News that the former president’s party had won control of the Senate boosted the prospect of sweeping tax cuts, more tariffs, and deregulation — seen as a boost for the greenback.
The dollar jumped 1.5 percent to 154.38 yen, its highest since July, while it was also up more than one percent against the euro and more than three percent against the Mexican peso.
Bitcoin sprung $6,000 higher to a record $75,371.69, topping its previous peak of $73,797.98 in March.
Trump has pledged to make the United States the “bitcoin and cryptocurrency capital of the world” and to put tech billionaire Elon Musk in charge of a wide-ranging audit of governmental waste.
“The price of bitcoin has closely followed Trump’s position in the polls and on betting markets,” Russ Mould, an analyst at AJ Bell, said ahead of Tuesday’s US election.
Investors are “potentially taking the view that a Republican victory would lead to a surge in demand for the digital currency”, he added.
Analysts said a clean sweep of Congress and the White House for Trump and Republicans would likely boost the dollar and Treasury yields owing to his plans to cut taxes and impose tariffs on imports.
Peter Esho, economist and founder at Esho Capital, said: “The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook.” With AFP
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