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Stock market snaps five-day rally

The stock market declined Wednesday on profit-taking to snap a five-day rally, with some speculative issues leading the retreat.

The Philippine Stock Exchange Index fell 37.49 points, or 0.5 percent, to 7,265.45 on a value turnover of P7.1 billion. Losers overwhelmed gainers, 127 to 64, with 48 issues unchanged.

ISM Communications Corp., a member of the group declared by the government as the country’s third major telecommunications firm, slumped 18.6 percent to P6.30, while MacroAsia Corp., which provides aviation-related services, tumbled 11.6 percent to P12.20.

Globe Telecom Inc., the biggest telecom company, dropped 4.3 percent to P1,920, while conglomerate SM Investments Corp. of retail tycoon Henry Sy fell 2.1 percent to P920.

Energy companies, meanwhile, suffered further losses on Wednesday following a collapse in oil prices while most Asian markets fell, but with the sharp losses witnessed in the morning being tempered.

Tokyo fell 0.4 percent, Sydney dropped 0.5 percent and Seoul slipped 0.3 percent with Wellington, Taipei, and Jakarta also in the red.

However, Hong Kong edged up 0.3 percent and Shanghai added 0.2 percent.

Nissan recovered marginally after France and Japan sought to reassure on the future of its tie-up with Renault following the arrest of head Carlos Ghosn on Monday, although Mitsubishi extended its drop.

While investors in all sectors are essentially in selling mode of late, firms linked to the oil industry are among the worst hit as the price of crude continues to plunge on concerns about demand and high production.

The commodity took another battering on Tuesday, with both main contracts down more than six percent following another Wall Street sell-off and as traders fret that Saudi Arabia might not deliver on planned production cuts.

Donald Trump’s support for Riyadh in the case of murdered journalist Jamal Khashoggi has been taken by some observers as a move to prevent them from lowering output at the December meeting of Opec and non-Opec members.

“At the heart of the matter is the lack of market respect for Opec rhetoric regarding deep production cuts, (which) have been ignored as the market now questions if the projected reduction would be entirely sufficient to rebalance markets given the expected glut in the first quarter,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

Adding to the dour mood is the China-US trade war―which shows no signs of easing just a week before Trump and China’s Xi Jinping are due to meet―as well as US waivers on buying Iranian oil and a slowing global economy.

Crude prices have plunged almost 30 percent from their four-year highs touched at the start of October.

Brent and WTI rose Wednesday but regional energy shares fell. Hong Kong-listed CNOOC lost more than three percent, while PetroChina and Sinopec were more than one percent off. Inpex dived 3.3 percent in Tokyo and Woodside Petroleum lost 2.1 percent in Sydney. With AFP

Topics: stock market , Philippine Stock Exchange Index , ISM Communications Corp. , MacroAsia Corp. , Globe Telecom Inc.
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