Stocks rose Wednesday led by select issues, as investors started to review their holdings after the monetary easing of the Bangko Sentral ng Pilipinas.
The Philippine Stock Exchange Index added 36.46 points, or 0.5 percent, to 7,797.75 on a value turnover of P6.1 billion. Gainers and losers were even at 92 each, while 52 issues were unchanged.
The Bangko Sentral on May 16 reduced the reserve requirement ratio of universal and commercial banks by 2 percentage points, or equivalent to about P190 billion in additional peso liquidity in the financial system.
Universal Robina Corp., the biggest snack food maker, climbed 2.6 percent to P159, while parent JG Summit Holdings Inc. gained 2.7 percent to P61.60.
Globe Telecom Inc., the second-largest telecommunications system, advanced 3 percent to P2,176, while Security Bank Corp., the sixth-biggest lender in terms of assets, rose 2.3 percent to P175.
The rest of Asian stocks sank Wednesday, tracking losses on Wall Street as investors grew anxious about a possible economic slowdown and the absence of any progress in resolving the US-China trade war.
Economists say the trade dispute between the world’s top two economic superpowers will have grim implications for consumers, who will have to bear the costs of punitive tit-for-tat tariffs.
Although an index of US consumer confidence on Tuesday registered an unexpectedly strong jump for May, it was not enough to allay investor fears, as US stocks sank, sending major indices to their lowest levels in two months.
May is now expected to be Wall Street’s first down month for the year.
“Unless we see a trade deal, negative sentiment in the market will likely continue,” Kyoko Amemiya, senior market advisor at SBI Securities, told AFP.
A report in Chinese state media that suggested Beijing would restrict exports of rare earths, using the minerals as leverage in the trade dispute, also fanned anxiety.
Rare earths are a key component in devices ranging from smartphones and cameras to televisions, and any move to restrict their supply would have a devastating impact on manufacturers, with China producing more than 95 percent of the metals.
Tokyo sank 1.2 percent, while Hong Kong fell 0.6 percent. Seoul also plunged 1.3 percent while Sydney slipped 0.7 percent and Singapore edged down 0.4 percent. But Shanghai inched up 0.2 percent.
Investors are concerned about a spat between the European Commission and Italy, where the far-right party of joint deputy prime minister Matteo Salvini topped European Parliament elections on Sunday.
An emboldened Salvini had said Tuesday he expected Brussels to hit Rome with a 3-billion-euro ($3.4-billion) fine over Italy’s rising public debt, which was 132 percent of the country’s GDP in 2018—way above the 60 percent EU ceiling.
With Salvini determined to push back against the EU’s requirements on austerity, analysts said the future outlook for the bloc was precarious.
“Populism is here to stay and will make future integration and budgetary decisions difficult to be agreed upon,” said OANDA senior market analyst Edward Moya. With AFP