Emerging market: Philippine stocks hit two-month low on China sell-off, virus woes


Protesters march towards the House of Representative where Philippine President Rodrigo Duterte is set to deliver his final State of the Nation Address in Quezon city, Philippines on Monday, July 26, 2021. Duterte is winding down his six-year term amid a raging pandemic and a battered economy. - AP

MANILA, July 26 (Reuters): Philippine stocks fell to a two-month low, it worst show since May 26, and led losses among Asian equities on Monday, as a sharp drop in Chinese shares and soaring Covid-19 cases in countries such as Malaysia, Indonesia and Thailand weighed on sentiment.

Chinese shares closed 2.3% lower as worries over the impact of government regulations hammered the education and property sectors, after Beijing barred for-profit tutoring in core school subjects.

"The drop (in South-East Asia) today in part is China-led," said Mitul Kotecha, chief emerging market Asia & Europe strategist at TD Securities. Equities in Manila fell 2.3%, leading losses in the South-East Asia region as strong US corporate earnings sucked funds out of emerging markets into Wall Street.

"The downturn in stocks (in the Philippines) can be traced to the ongoing pickup in Delta variant infections in the country, with businesses concerned about a potential return to stringent lockdowns," said Nicholas Mapa, a senior economist at ING Research.

"Philippine financial markets will likely be pressured in the near term as the spate of negative news continues."

Thailand reported a record number of coronavirus cases on Monday, while Malaysia has notched up more than 1 million infections, as the virulent Delta variant carves a deadly path through South-East Asia.

The Indian rupee, Taiwan's dollar and Singapore's dollar traded flat to 0.1% weaker as the greenback held near its highest level since April ahead of a US Federal Reserve meeting.

The US central bank will conclude its two-day policy review on Wednesday, with market participants watching out for clues on the timing of stimulus tapering.

Meanwhile, Indonesia on Sunday extended its Covid-19 restrictions by a week to Aug. 2 and said it would add more intensive care units amid a rise in deaths.

South Korean stocks and the won weakened ahead of second-quarter gross domestic product data due on Tuesday, as worries over rising Covid-19 cases took hold.

South Korea's economy is likely to post its fastest year-on-year growth in a decade in the second quarter on resilience in exports and investments, a Reuters poll showed. - Reuters

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Philippines , Stocks , Battering , Worst Show , Since , May 26

   

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