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Monday, April 22, 2024

Stock market wipes out 2016 gains

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Stocks plummeted for a second day, wiping out all gains this year, as investors worried about the impact of Donald Trump’s presidency on global trade.

The Philippine Stock Exchange index, the 30-company benchmark, dipped 103 points, or 1.5 percent to close at 6,871.48 Monday.  The bellwether was also down 1.2 percent since the start of the year.

The heavier index, representing all shares, also tumbled 49 points, or 1.2 percent, to settle at 4,170.92, on a value turnover of P7.3 billion.  Losers outnumbered gainers, 140 to 48, while 39 issues were unchanged.

All six sectors posted losses, while only two of the 20 most active stocks ended in the green.  Alterra Capital Partners Inc. rose 0.7 percent to P2.99, while Cemex Philippines Holdings Inc. gained 0.5 percent to P11.42.

Meanwhile, equities around the world have seen volatile trading since the tycoon’s shock election win, with his pledge of big-spending measures and tax cuts leading to predictions of a surge in inflation and in turn higher borrowing costs.

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The prospect of better and safer returns in the US has also led to an exodus from emerging markets and currencies, while the Mexican peso is also struggling owing to concerns about Trump’s warning he will tear up a key trade deal.

By the end of the morning session Tokyo’s Nikkei was up 1.5 percent, with exporters rallying on the back of the weakened yen. The dollar was at 107.45 yen, its highest mark since July.

“The Federal Reserve now face the conundrum of rising inflation expectations,” Chris Weston, chief market strategist in Melbourne at IG Ltd., said, according to Bloomberg News.

“What we saw last week was a genuine change in the thought process of many money managers, with some feeling we need to be prepared for inflation, while many others have been truly sceptical of the moves and note that while markets are firmly in the ‘hope’ phase there are great execution risks.”

Japanese investors were also lifted by news the economy grew more than expected in the third quarter as exports offset slack consumer spending.

Wellington also gained 0.5 percent as a deadly earthquake in New Zealand’s south island boosted construction firms on expectations of a rebuilding program.

And Shanghai put on 0.2 percent despite data showing below-forecast retail sales and industrial output for October.

However, Hong Kong sank 1.4 percent, extending a similar loss on Friday, while Sydney shed 0.8 percent and Singapore fell one percent. With AFP

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