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Friday, March 29, 2024

Market closes flat; Alliance Select up

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Stocks barely moved amid thin trading Monday, as the government assessed the extent of damage left by Typhoon Ompong on vast agricultural areas in Luzon and its impact on food prices.

The Philippine Stock Exchange index, the 30-company benchmark, closed nearly flat at 7,413.56, as four of the six sub-sectors declined.

The heavier index, representing all shares, fell 5 points, or 0.1 percent, to settle at 4,550.00, on a value turnover of P3.9 billion.  Losers outnumbered gainers, 99 to 95, while 44 issues were unchanged.

Dozens of people were missing in a mountainside village in Benguet province, while thousands of hectares of rice farms were inundated when this year’s strongest typhoon hit Luzon on its way to the South China Sea over the weekend.

The country is suffering from high inflation, at a nine-year high of 6.4 percent in August, caused mainly by a tight supply of rice and other food items. Analysts were worried that a larger-than-expected typhoon damage would further lift consumer prices, something that could affect household demand and spending.

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Ten of the 20 most active stocks ended in the green, led by Alliance Select Foods International Inc. which surged 15.2 percent to P1.29.  Food manufacturer Universal Robina Corp. gained 2.8 percent to P145.30, while developer SM Prime Holdings Inc. rose 1.6 percent to P37.

Meanwhile, Asian markets sank Monday following reports that Donald Trump was planning to hit China with another round of tariffs, dealing a blow to hopes for talks between the two economic giants.

Traders sent regional equities surging on Thursday and Friday as it emerged that Treasury Secretary Steven Mnuchin had offered to meet officials from Beijing to avert an all-out trade war.

However, The Washington Post and Wall Street Journal said the president had decided to impose 10 percent levies on $200 billion of Chinese imports and could make an announcement in the coming days.

That would come on top of the $50 billion already announced over the summer and would account for about half of China’s exports to the United States. Beijing has threatened to retaliate against any measures.

“Whether this is little more than the president using this leverage as a negotiating tactic, China officials will continue to be frustrated,” said Stephen Innes, head of Asia-Pacific trading at Oanda.

“This good cop bad cop routine continues to undermine Mr. Mnuchin’s efforts as it’s still not clear if anyone other the Trump himself is commissioned to cut a deal. And not too unexpectedly, and quite ominously, China could cancel the meeting.”

Hong Kong led losses Monday, dropping 1.3 percent in the afternoon while Shanghai ended 1.1 percent off. Seoul and Singapore each lost 0.7 percent, while Taipei, Jakarta, and Mumbai also saw deep losses. Sydney edged 0.3 percent higher. 

Tokyo was closed for a public holiday.

In early European trade London fell 0.4 percent, Frankfurt shed 0.6 percent and Paris was 0.3 percent off.

But while investors were in a selling mood, some positives could be taken from reports that Trump was considering 10 percent tariffs instead of the feared 25 percent, said JP Morgan Asset Management global market strategist Kerry Craig.

“No more tariffs would still be the best outcome for the markets but with the US administration seemingly wanting to pursue its longer term strategic agenda against China, that’s unlikely to be the case, especially as there is little in the way of pain being felt by the US economy or equity market,” he said. With AFP

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