Investors turned bargain hunters in the Philippines, as the fading Santa Claus rally in the US increased recession concerns. Sales data for existing homes and new homes will be released Wednesday and Friday, respectively.

The peso recorded its strongest close against the dollar since 5 August while the Philippine Stock Exchange index regained its footing.

The benchmark index gained from yesterday's loss by 0.68 percent or 43.85 points to 6,458.12.

Oil prices climbed on Monday grounded on optimism around China relaxing its Covid-19 restrictions outweighed fears of a global recession that would weigh on energy demand, Regina Capital Development Corp. managing director Luis Limlingan said.

Brent crude gained 76 cents to settle at $79.80 per barrel, while US West Texas Intermediate crude rose 90 cents to $75.19/bbl.

Japan tweaks policy

Markets fell Tuesday and the yen rallied after Japan announced a surprise tweak to its ultra-loose monetary policy, just as traders were fretting that central bank efforts to tame inflation will tip economies into recession.

Sentiment was also being weighed down by a spike in Covid infections in China as officials roll back many of the strict containment measures that have been in place for almost three years.

A so-called Santa rally appears to be eluding investors, with the mood dampened by last week's warnings from the Federal Reserve and European Central Bank that they will likely push interest rates higher than expected next year.

Hard blow dealt

The remarks dealt a blow to a short rally across equities that had been fueled by data showing inflation coming down.

Adding to the selling pressure were comments from former New York Fed chief William Dudley, who told Bloomberg Television that any sign of optimism in markets could make monetary policymakers tighten even more.

Tokyo sank more than two percent after the Bank of Japan adjusted its parameters for controlling bond yields, in a shift away from its long-running dovish stance of keeping rates ultra-low to boost the struggling economy.