Stocks extend slump; Jollibee falls

posted September 06, 2018 at 07:10 pm
by  Manila Standard Business
Stocks tumbled Thursday for the second straight day, pulled down by concerns on rising inflation and fears of a spillover from the economic crises in some emerging markets.

The Philippine Stock Exchange Index lost 113.56 points, or 1.5 percent, to 7,638.71 on a value turnover of P6.7 billion. Losers routed gainers, 161 to 37, with 41 issues unchanged.

Analysts fear the nine-year high inflation rate of 6.4 percent in August could force the Bangko Sentral ng Pilipinas to raise the interest rate again this month, after a 100-basis-point adjustment in three separate Monetary Board meetings this year. 

Higher prices cut into the budget of consumers, while increased interest rates will raise the production cost of companies. 

Jollibee Foods Corp., the biggest fast-food chain, dropped 3.2 percent to P276, while Alliance Global Group Inc. of tycoon Andrew Tan, which has a stake in Jollibee rival McDonald’s, slumped 6.4 percent to P13.48.

Conglomerate Ayala Corp. fell 3 percent to P944, while Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, declined 2.6 percent to P70.30.

The rest of Asian equities suffered fresh losses Thursday, extending the previous day’s rout as concerns about contagion from emerging markets fray investor nerves, while sentiment is also being dampened by the possibility of further US tariffs on China.

And while emerging market currencies—which have taken a battering in recent weeks—enjoyed a much-needed breather, there are warnings of further pain to come in foreign exchanges.

Worries that financial crises in Argentina, South Africa and Turkey will spill over into major economies fueled a blood-letting across Asia on Wednesday, which filtered through to Europe.

“Contagion is a normal reaction,” George Boubouras, director at Salter Brothers Asset Management, said on Bloomberg Television. The contagion “will get worse”, he warned.

Tokyo ended 0.4 percent lower, while Hong Kong shed 1.3 percent after diving 2.6 percent Wednesday. Sydney fell 0.4 percent and Wellington lost 1.4 percent.

Shanghai lost 0.5 percent, Seoul sank 0.2 percent and Singapore was 0.3 percent off.

Jakarta, which lost more than three percent Wednesday, was 0.6 percent higher.

Wall Street ended mixed with the Dow edging up but the Nasdaq took a hit from a sell-off in tech firms as top officials at Facebook and Twitter struggled in congressional testimony and the White House warned of a possible legal crackdown.

Trump “has the tech giants in his sights” following his claims of political bias against conservatives, said Greg McKenna, chief market strategist at AxiTrader.

“That’s important for global markets because the only thing between where we are today and a complete rout is the relative stability of US stocks. And we know a big chunk of the S&P’s rally has been the performance of tech stocks whose rally has been going increasingly vertical.”

On currency markets, the Indonesian rupiah edged up after hitting its lowest level since the Asian financial crisis 20 years ago though it skirted the 15,000-to-the-dollar mark. The Mexican peso also posted gains but the South African rand was flat after paring an early rally. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi
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