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Market retreats; Globe, Ayala drop

The stock market slipped Thursday on profit-taking to snap a four-day rally, as the China-US trade frictions continue to dog investors.

The Philippine Stock Exchange Index fell 11.04 points, or 0.1 percent, 7.804.03 on a value turnover of P7.2 billion. Losers beat gainers, 110 to 87, with 53 issues unchanged.

LT Group Inc. of airline and tobacco tycoon Lucio Tan lost 3.3 percent to P15.86, while Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, dropped 3.1 percent to P72.

Globe Telecom Inc., the second-largest telecommunications company, declined 2.3 percent to P2,100, while parent Ayala Corp. slipped 1.1 percent to P895.

The rest of Asian equities tumbled Thursday, while the pound hit a fresh four-month low on Brexit worries and energy firms were battered by plunging oil prices.

Markets across the region were in the red as traders ran to the hills, with no signs of a break in the tariffs stand-off between the world’s top two economies keeping optimism in check.

The heavy selling comes after a relatively sedate couple of days in Asia and follows losses on Wall Street, with warnings that more volatility is expected for some time.

Tensions between China and the US have increased after Donald Trump banned telecoms giant Huawei from the US market and prevented American firms from selling to it.

The move has led a number of companies around the world to cut back their business with the firm, including Google, Japan’s Panasonic and BT in Britain, among others.

The row, which has seen the trade war widen to also become a battle over technology, has hammered the sector with major firms seeing their valuations tumble in recent weeks.

On Thursday Hong Kong market heavyweight Tencent dived more than four percent, Sony shed 3.7 percent in Tokyo, Seoul-listed LG Display dived more than three percent and TSMC shed a similar amount in Taipei.

“As ever, the sentiment is vulnerable to headline flashes on trade, and we can expect this sort of flip-flopping in sentiment daily until more clarity emerges on any progress on the US-China trade front,” said OANDA senior market analyst Jeffrey Halley.

“In the bigger picture, equities may find upward momentum difficult on a consistent basis, while the trade picture and its knock-on effects remain so cloudy.”

Hong Kong was among the worst performers with the Hang Seng Index diving 1.8 percent, Shanghai 1.4 percent lower and Tokyo ending down 0.6 percent.

Taipei was 1.4 percent off while Seoul shed 0.3 percent.  

“Trade is still front and center for equity markets with the mood looking increasingly downbeat,” said Neil Wilson, chief market analyst at  Markets.com. “It rather seems the US and China are hunkering down for the long haul—a new long march.”  

However, Mumbai’s Sensex soared more than two percent to break the 40,000 for the first time ever as traders welcomed polls indicating business-friendly Prime Minister Narendra Modi’s BJP were on course to win another majority.

The Nifty market of 50 firms also crossed 12,000 points to chalk up a new landmark. 

Despite the broad market losses, many observers remain hopeful of an eventual China-US trade agreement. With AFP

Topics: Philippine Stock Exchange Index , LT Group Inc. , Metropolitan Bank & Trust Co. , Globe Telecom Inc.
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