The stock market extended a slump for the fourth straight day Wednesday on lingering concerns over the widening trade deficit.
The Philippine Stock Exchange Index tumbled 89.68 points, or 1.1 percent, to 7,920.24 on a value turnover of P7.3 billion. Losers overwhelmed gainers, 134 to 75, with 50 issues unchanged.
The Philippine Statistics Authority reported the trade deficit swelled 51 percent in 2018 to a record $41.4 billion from $27.38 billion in 2017, as imports outpaced exports. The widening gap could exert further pressure on the peso to weaken in 2019.
GT Capital Holdings Inc. lost 2.1 percent to P1,048, while banking unit Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, fell 1.6 percent to P81.
Alliance Global Group Inc. of tycoon Andrew Tan dropped 4.5 percent to P13.66, while casino operator Bloomberry Resorts Corp. of tycoon Enrique Razon Jr. slipped 2.2 percent to P11.70.
The rest of Asian stocks surged Wednesday as President Donald Trump said he may extend his trade deal deadline with China, and a report claimed his counterpart Xi Jinping would meet top US officials in Beijing, seeming to boost the prospects of an agreement.
High-level talks are due to begin in the Chinese capital Thursday aimed at an accord to stop sharp US tariff hikes that could damage the global economy.
Trump said he could let his March 1 deadline “slide for a little while” if the two sides were close to a meaningful deal, adding that he expects a summit with Xi “at some point.”
Later a report in the South China Morning Post said Xi would personally meet the US delegation in Beijing, suggesting a redoubled effort to make progress on a deal.
The developments improved market sentiment on the likelihood of a resolution to prevent US tariffs more than doubling on $200 billion in Chinese imports next month. Washington is demanding changes from Beijing on what it says are unfair commercial practices.
Tokyo added a further 1.3 percent after Tuesday’s gains to finish at a two-month high.
Hong Kong rose 1.1 percent, and Shanghai earned 1.8 percent on the news, following Wall Street’s lead.
However, some analysts struck a cautious tone, noting that much work needs to be completed before a framework agreement is in reach.
“The rally in stocks has been based on hope rather than any concrete agreements overnight,” warned Oanda senior analyst Jeffrey Halley, predicting short-term volatility to come as headlines emerge from Beijing.
Elsewhere Sydney shed 0.3 percent, with calls for a snap election amid political tensions over refugees adding to underwhelming corporate earnings and subdued metal prices.
The New Zealand dollar soared 1.6 percent as the central bank held interest rates unchanged and forecast no moves until 2021—stumping expectations it may follow dovish leads elsewhere by indicating a rate cut.
Renewed global investor confidence saw a movement away from the greenback—which has enjoyed a strong rally in the past week—to riskier currencies. With AFP