Stocks slip; Globe, ISM decline

The stock market fell Tuesday as investors re-evaluated the Federal Reserve’s interest rate options following last week’s strong US jobs report.

The Philippine Stock Exchange Index fell 9.48 points, or 0.1 percent, to 8,042.04 on a value turnover of P5.9 billion. Losers beat gainers, 125 to 71, with 44 issues unchanged.

Globe Telecom Inc., the second-biggest telecommunications company, dropped 2.9 percent to P2,132, while Megaworld Corp., the largest lessor of office spaces, lost 2 percent to P6.

Speculative stock ISM Communications  Corp. of businessman Dennis Uy slumped 11.3 percent to P6.07, while sister unit Chelsea Logistics and Infrastructure Holdings Corp. fell 9.7 percent to P8.15.

Most Asian markets, meanwhile, extended losses Tuesday.

Traders globally ran for cover after the forecast-beating payrolls figures dealt a blow to hopes for a steep cut in borrowing costs, stopping in its tracks an equities rally and pushing the dollar higher.

Seoul fell 0.6 percent to extend a sell-off sparked by last week’s decision in Tokyo to restriction exports used by South Korea’s chip and smartphone companies, in a row linked to Japan’s use of forced labour during World War II.

The stand-off has hammered South Korean titan Samsung Electronics and SK Hynix, crucial producers of memory chips. Samsung is down around five percent since Monday and SK Hynix is off more than three percent.

Sydney was 0.1 percent lower, while Wellington, Taipei and Mumbai were also down.

The focus now turns to the release of minutes from the Fed’s June policy meeting and the two-day congressional testimony of central bank boss Jerome Powell, while dealers continue to monitor developments in the China-US trade talks.

“The better-than-expected job rebound is forcing the market to rethink its pricing on the number of rate cuts,” said OANDA senior market analyst Alfonso Esparza.

“Three was the group-think forecast, now moving down to two, but always with an eye on the US-China trade war and its possible negative impact on US growth.”

The fading likelihood of a 50-basis-point cut in rates, as had widely been hoped, provided strong support to the dollar, which has held gains against the pound and euro while pushing to a more than one-month high on the yen.

But while the weaker Japanese unit helped Tokyo’s Nikkei to positive territory in the morning, most other markets were in the red.

Hong Kong slipped 0.8 percent while Shanghai closed down 0.2 percent with observers pointing out that liquidity was being hit by preparations for the start of a new technology board on July 22.

“The pace of issuance and the timetable of trading debuts on the tech board are faster than the market expected,” Jiang Liangqing, at Ruisen Capital Management in Beijing, told Bloomberg News.

“Investor enthusiasm seems very strong for these new shares.”

On oil markets, both main contracts were in negative territory as a pick-up in the dollar made it more expensive, while traders continue to fret over the impact of weaker global growth on demand. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , Globe Telecom Inc. , Communications  Corp.
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