The stock market slumped Tuesday as it played catch-up with the rest of Asia after a holiday in Monday. Asian markets tanked in the previous day after US President Donald Trump ramped up his trade war with China by hiking tariffs on more than half-a-trillion dollars worth of imports.
The Philippine Stock Exchange Index tumbled 142.03 points, or 1.8 percent, to 7,747.38 on a value turnover of P13.5 billion. Losers beat gainers, 124 to 88, with 39 issues unchanged.
Major property developer Ayala Land Inc. dropped 3.4 percent to P47.25, while sister unit Bank of the Philippines Islands, the third-biggest lender in terms of assets, fell 3.1 percent to P87.10.
Conglomerate JG Summit Holdings Inc. of industrialist John Gokongwei lost 3.4 percent to P66.45, while PLDT Inc., the largest telecommunications firm, declined 2.8 percent to P1,117.
But Asian markets mostly rose Tuesday, recovering from the previous day’s pounding, after Donald Trump said China-US trade talks would resume soon, though the president’s sharp changes in tone are keeping investors on edge.
Regional equities tanked and the yuan plunged Monday in response to news at the weekend that Washington would hike tariffs on more than half-a-trillion dollars of Chinese imports after Beijing unveiled levies on tens of billions of dollars of US goods.
Trump’s call for US firms to pull out of China and comments about not needing the country added to the sense of dread that the trade war would deepen and run for some time.
However, investors who had run for the hills in the morning returned in later trade after he said in a G7 news conference in France that negotiations would resume very soon and Beijing had telephoned saying it wanted to strike a deal.
He later described the talks as “more meaningful than at any time,” while China’s top negotiator called for calm and said he opposed any escalation in the stand-off.
While the remarks were too late to fuel a meaningful recovery in Asia, stocks in Europe and the US rallied.
Tokyo ended up one percent, Shanghai put on more than one percent and Sydney rose 0.5 percent. Seoul, Singapore, Wellington, Taipei, Jakarta and Mumbai also posted healthy gains.
But Hong Kong fell in the afternoon with investors still spooked by fresh violent protests in the city over the weekend.
The early momentum in regional markets died down owing to lingering uncertainty about the outlook for the trade talks. Safe-haven gold recovered morning losses while higher-yielding, riskier assets saw their initial advances pared.
The yuan also remained under pressure, hitting a new 11-year low against the dollar.
“It is not clear in what context that (Beijing) phone call was made,” said Stephen Innes at Valour Markets. “Indeed, a spokesperson for the Chinese foreign ministry indicated he was ‘not aware of’ the call.
“However, does it matter if the call happened? The fact that President Trump is striking a more conciliatory tone is what’s essential for market sentiment.
“It’s possible both sides needed to push the trade envelope to unbearable proportions, and maybe that’s what was required all along for cooler heads to prevail.” With AFP