Stocks retreated Tuesday amid a global slump as Donald Trump’s firing of the US acting attorney general added to concern over the unpredictability of decisions in the new administration.
The Philippine Stock Exchange index, the 30-company benchmark, fell 107 points, or 1.5 percent to close at 7,229.66. Despite Tuesday’s loss, the bellwether still gained 5.7 percent in the first month of 2017.
The heavier index, representing all shares, also dropped 47 points, or 1.1 percent, to settle at 4,367.81, on a value turnover of P5.3 billion. Losers outnumbered gainers, 126 to 66, while 43 issues were unchanged.
Five of the 20 most active stocks ended in the green, led by convenience store operator Philippine Seven Corp. which jumped 6.1 percent to P140 and conglomerate Metro Pacific Investments Corp. which advanced 2.9 percent to P6.84.
Meanwhile, Asian markets also retreated, with fears growing about the impact of Trump’s presidency on the global economy as he faced a wave of criticism over his controversial immigration policy.
Traders fled for the exits for a second day after the new US leader signed an executive order Friday banning entry to travelers from seven Muslim-majority countries and imposing a temporary ban on refugees.
While the White House defended the move as aimed at fighting terrorism, world leaders and protesters around the world condemned it as a war against Muslims.
The overwhelming outrage spooked investors, who fear the announcement could be a sign the tycoon will press ahead with many of his protectionist promises, overshadowing economy-boosting measures such as infrastructure spending and tax cuts—which had fueled a rally in November and December.
All three main Wall Street indexes ended lower, while London, Paris and Frankfurt each lost more than one percent.
The sell-off continued into Asia, with Tokyo ending 1.7 percent lower. Dealers were unimpressed by the Bank of Japan’s decision to raise its economic growth forecasts through 2019 but delay any fresh monetary-easing measures.
Sydney shed 0.7 percent and Seoul sank 0.8 percent. Singapore, Wellington and Kuala Lumpur were also sharply lower.
Hong Kong and Shanghai were closed for holidays.
The dollar also lost ground against most of its major peers, with the yen getting extra support from the BoJ’s lack of action on monetary easing.
Higher-yielding currencies such as the South Korean won, Australian dollar and Indonesian rupiah were also stronger.
“The fulcrum for the fear and selling in stocks and the US dollar… was the public’s visceral response to the president’s immigration and travel ban,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, in a note.
“The raft of executive orders from the White House, together with tweets and belligerence from the president since taking the oath of office, have simply reminded markets that there is some darkness in Trump’s policies and Trumponomics.”
Friday’s order was the latest controversial move by Trump in his first week, which also included a row with Mexico over trade and his proposed border wall, battles with the media over the crowd size at his inauguration and unsupported assertions that millions of people voted illegally in the 2016 election.
On Monday he sacked his acting attorney general, a holdover from the Obama administration, after she ordered Justice Department attorneys not to defend his controversial immigration ban.
But despite fears on trading floors, Stephen Innes, senior trader at Oanda, said markets could recover if Trump implements his pro-growth measures.
“While the Muslim travel ban may have been universally condemned, keep in mind, capital markets lack a moral compass, and while it makes a compelling storyline, the market meltdown overnight was investors voting with their feet in a direct challenge to the Trump inflation trade,” he said. With AFP, Bloomberg