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Market extends losses; SBC rise

Stocks fell for a fifth day, dragging the benchmark index to a month low, amid regional concerns over the trade war between the US and China.

The Philippine Stock Exchange index, the 30-company bellwether, dropped 78 points, or 1 percent, to close at 7,518.01 Tuesday.  It was also down 12.2 percent since the start of the year.

The heavier index, representing all shares, also tumbled 43 points, or 0.9 percent, to settle at 4,597.28, on a value turnover of P5.4 billion.  Losers outnumbered gainers, 150 to 58, while 42 issues were unchanged.

Only three of the 29 most active stocks ended in the green, led by Security Bank Corp. which climbed 1.5 percent to P193.  Globe Telecom Inc. gained 0.8 percent to P2,120, while power retailer Manila Electric Co. rose 0.3 percent to P380.

Meanwhile, Asian investors trod uneasily on Tuesday as concerns over trade and emerging markets drag on confidence but the pound held on to gains after the European Union’s chief Brexit negotiator’s optimistic remarks.

Donald Trump ramped up the China-US tariffs row late last week by threatening to tax all imports from the Asian giant, sending equities further into the red Monday.

While some investors are returning to pick up bargain stocks, the ongoing worry about a possible full-blown trade war between the world’s top two economies is keeping a lid on prices.

Hong Kong fell 0.4 percent in the afternoon and is now almost 20 percent down from its record touched in January putting it close to a bear market. Shanghai ended down 0.2 percent around lows not seen since January 2016.

Singapore lost 0.4 percent and Seoul dropped 0.2 percent. Manila shed more than one percent.

However, Tokyo rose 1.3 percent as exporters were supported by a weaker yen, Sydney was up 0.6 percent and Wellington surged two percent.

In early European trade London, Paris and Frankfurt each fell 0.2 percent.

Dealers are also awaiting developments in Argentina, which is holding talks with the International Monetary Fund on accessing bailout cash as it looks to avert an all-out crisis. 

The country’s troubles, along with worries in Turkey and South Africa, have led to concerns of contagion in other emerging markets or even the global economy.

On currency markets, sterling held up after surging Monday on the back of comments from EU Brexit negotiator Michel Barnier that lifted hopes Britain will leave the bloc with some sort of divorce deal.

He said it was “realistic” to expect an agreement within the next eight weeks, with Britain slated to leave early next year.

“Barnier’s optimism helped trigger a sterling relief rally as the markets were buying back volumes of short sterling position,” said Stephen Innes, head of Asia-Pacific trade at Oanda, adding that a deal could lead to a possible increase in interest rates.

“This positive shift could have a significant central bank effect over the medium term as it’s thought that a Brexit deal is a big piece of the EU puzzle that has been keeping both Bank of England and the European Central Bank on a defensive back.”

However, there is some unease about an ongoing row within the ruling Conservative party over Brexit that is causing uncertainty about Prime Minister Theresa May’s political future.

Emerging markets and higher-yielding units remain beaten down, though most were slightly up Tuesday. The Indian rupee added 0.2 percent but is wallowing near record lows against the dollar.

The Russian ruble rose 0.4 percent and South African rand climbed 0.6 percent, while the Mexican peso, South Korean won and Thai baht were also higher. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi
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