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Market retreats; Megaworld rises

The stock market fell Tuesday on profit taking, with investors trading cautiously amid resurgent oil prices, and monitoring the current US-China trade talks.

The Philippine Stock Exchange Index dropped 76.83 points, or 1 percent, to 7,833.75 on a value turnover of P8.1 billion. Losers beat gainers, 132 to 84, with 39 issues unchanged.

Major property developer Ayala Land Inc. declined 3.7 percent to P43, while Vista Land & Lifescapes Inc. of the Villar Group lost 6.2 percent to P7.50.

Universal Robina Corp., the biggest snack food maker, fell 3.1 percent to P140.50, but Megaworld Corp., the largest lessor of office spaces, climbed 5.3 percent to P5.39.

The rest of Asian markets were mixed Tuesday with investors cautiously optimistic that China and the US can reach a deal ending their trade war as the two sides prepare to resume talks this week.

With New York closed for a public holiday there were few catalysts to drive buying, though the release of Federal Reserve minutes on Wednesday will be pored over for an idea of the bank’s interest rate plans.

Top-level officials from the world’s two biggest economies will reconvene in Washington after a series of talks in Beijing last week, with the US side telling President Donald Trump they had been “very productive.”

The positive tone from the diplomats, and the president’s indication he could extend a deadline for agreement, boosted regional markets Monday, extending a 2019 rally fueled by optimism about an end to the nearly year-long tariffs spat.

Tokyo finished 0.1 percent higher,  Hong Kong dipped 0.3 percent in the afternoon and Shanghai closed fractionally up.

Sydney gained 0.3 percent, Singapore put on 0.2 percent and Taipei 0.2 percent, with Seoul and Wellington each off 0.2 percent. Mumbai and Jakarta were up.

However, OANDA senior market analyst Jeffrey Halley warned of trouble ahead if Chinese and US officials do not agree a deal.

“The rallies (Monday) were impressive given the talks ended last week without any concrete results and have yet to even recommence in Washington this week due to the US public holiday,” he said.

“Without sounding like a damp squib, there is now a vast amount of ‘optimism’ baked into currency, stock and energy market prices globally and precisely zero concrete detail. The unwind, should no deal be struck, could be very ugly.”

Oil prices were mixed after rallying Monday on trade talks hope and signs that Opec and other key producers are narrowing output.

“Saudi Arabia seems willing to do whatever is necessary to reach levels of $80 a barrel, and judging by the price reaction, they’re on track,” said Eugen Weinberg, head of commodities research at Commerzbank AG.

“Even rather bearish factors, like a stronger-than-expected rise in US oil production, does not seem to derail the price recovery.”

On currency markets the pound was down, with uncertainty fanned by news that seven pro-remain MPs had split from Britain’s opposition Labour Party over its handling of Brexit and a row over antisemitism. With AFP

Topics: Ayala Land Inc. , Vista Land & Lifescapes Inc. , Universal Robina Corp. , Megaworld Corp.
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