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Stock market tumbles; PNB dips

The stock market fell Monday as the budget impasse lingers and on concerns it will restrict economic growth this year.

The Philippine Stock Exchange dropped 92.84 points, or 1.2 percent, to P7,787.98 on a value turnover of P7.9 billion. Losers beat gainers, 107 to 87, with 47 issues unchanged.

The country’s economic managers earlier warned that growth in the gross domestic product would slow down with a re-enacted budget.

Philippine National Bank, the fifth-biggest lender in terms of assets, slumped 5.6 percent to P53.50, while conglomerate San Miguel Corp. declined 4.2 percent to P173.70.

Universal Robina Corp., the largest snack food maker, lost 3.6 percent to P151.40, while Puregold Price Club Inc. of retail tycoon Lucio Co also fell 3.6 percent to P46.

The rest of Asian markets were mixed Monday, with an early rally in some cities pared, though investors remain upbeat thanks to a healthy start to the US earnings season and hopes for China-US trade talks.

Traders raced out of the blocks as they put last week’s stutter behind them, boosted by data last week showing a sharp jump in credit growth in China as easing measures kick in, while exports beat expectations and inflation perked up.

New York’s three main indexes provided a positive lead after Wall Street titan JP Morgan recorded a pick-up in profits, suggesting the economy remains in rude health and fuelling optimism for upcoming corporate reports.

“The environment of easier financial conditions is beginning to have an impact on the broader economy,” Binay Chandgothia at Principal Global Investors told Bloomberg TV.

“If that is the case and growth does pick up, you’ll see an uptick in analyst expectations and earnings as well, which should help continue the rally.”

Tokyo added 1.4 percent, Singapore and Sydney were flat, while Wellington added 0.8 percent. Seoul, Mumbai, Taipei and Jakarta were also higher.

However, profit-takers stepped in as the day wore on, leading Hong Kong and Shanghai to end with losses, while Singapore also suffered a sell-off. Investors are now looking ahead to the release of Chinese growth figures Wednesday.

Investors were back in a buying mood after last week’s gyrations that came on the back of concerns about a possible new trade war between the US and the European Union as Donald Trump threatened to hit the bloc with tariffs over subsidies to aviation giant Airbus.

Buying was also being supported by comments from Treasury Secretary Steven Mnuchin, who said at the weekend that he was “hopeful we’re getting close to the final round of concluding issues” on the China trade talks.

The remarks were picked up as another positive sign that the trade war between the world’s top two economies, which helped hammer global markets last year, could be nearing an end.

The International Monetary Fund said the world economy should start to bounce back towards the end of the year, as long as China and the US resolve their differences. With AFP

Topics: Philippine Stock Exchange , Philippine National Bank , San Miguel Corp. , Universal Robina Corp.
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