MANILA, Philippines - Local share prices succumbed to profit taking yesterday as investors cashed in on gains from the market’s recent run-up, bucking the uptrend in other Asian bourses.
Around the region, stock markets reversed early losses to move higher yesterday after US President Barack Obama won a fiercely contested race for re-election.
The benchmark Philippine Stock Exchange index (PSEi) shed 36.32 points (0.6 percent) to close at 5,437.29, just a day after hitting a new all-time high.
All sub-indices, except for holding firms, were in the red, as decliners outnumbered gainers 114 to 51, while 47 stocks were unchanged.
Stock markets worldwide had been in a state of suspended animation throughout the week as investors waited for the cliffhanger US election to end. Now, with the Republican challenger Mitt Romney defeated, politicians in the world’s biggest economy can refocus on issues other than the campaign.
One of the most pressing issues facing the US is the looming “fiscal cliff,” a combination of higher taxes and government spending cuts that automatically takes effect unless Congress acts by Jan. 1.
Economists have warned that if this so-called fiscal cliff is not avoided, the adverse effects could push the US economy back into recession. Deciding the election is the first step toward a resolution.
Japan’s Nikkei 225 index, bobbling between gains and losses, shed 2.26 points to 8,972.89. Hong Kong’s Hang Seng added 155.42 points to 22,099.80. South Korea’s Kospi gained 0.2 percent to 1,933.52. Australia’s S&P/ASX 200 rose 0.7 percent to 4,516.50. Benchmarks in New Zealand, Indonesia, Singapore, mainland China and Taiwan also rose.
Francis Lun, managing director of Lyncean Holdings in Hong Kong, said an Obama victory means an extension of the status quo.
“Nothing will change. We will have ultra-low interest rates, a $1-trillion deficit, and quantitative easing,” Lun said. “Bernanke will keep his job as Fed chairman. As for the fiscal cliff, the president will do something to minimize the effect of tax increases and spending cuts.”