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Sunday, June 16, 2024

Stocks slip; SM Prime, JG Summit lead losers

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Stocks fell slightly Friday on profit taking on uncertainty about the chances of a fresh US stimulus package as talks for a broader agreement appeared to be back on.

The Philippine Stock Exchange Index slipped 11.05 points, or 0.2 percent, to 5,931.61 on a value turnover of P5.6 billion. Gainers, however, beat losers, 119 to 76, with 43 issues unchanged.

SM Prime Holdings Inc. of the Sy Group fell 2.2 percent to P29.10, while JG Summit Holdings Inc. of the Gokongwei Group declined 1.6 percent to P62.80.

Dito CME Holdings Corp., the third major telecommunications firm, however, rose 7.3 percent to P6.16, while Now Corp. of the Velarde family advanced 5.5 percent to P4.77.

The rest of Asian markets drifted Friday. Global markets were jolted after President Trump on Tuesday told his team to stop discussions with Democrats so that lawmakers could concentrate on passing his Supreme Court nomination.

However, he then tweeted that he wanted the two sides to pass legislation giving $1,200 handouts to struggling Americans and supporting small businesses and airlines, providing a bounce for equities.

Wall Street provided another positive lead but Asian markets struggled to maintain any momentum.

Tokyo, Hong Kong, Singapore, Jakarta and Bangkok were slightly lower, while Sydney was barely moved. Wellington and Mumbai were slightly higher.

Shanghai jumped more than one percent, though, as traders in mainland China returned from their Golden Week holiday.

House Speaker Nancy Pelosi rejected the call for piecemeal measures and insisted a broad deal was needed, though acknowledged Thursday that discussions were ongoing with Treasury Secretary Steven Mnuchin.

“We’ve told the White House we’re at the table, we want to continue the conversation,” she said, adding that “we’ve made some progress.”

Meanwhile, on the same day, Trump told Fox Business Network: “Well, I shut down talks two days ago because they weren’t working out. Now they are starting to work out, we’re starting to have some very productive talks.”

Axios reported that the about-turn came after the president became concerned about the negative market reaction to the talks being called off.

“The Democrats appear to have called President Trump’s bluff on his standard negotiating tactic of abruptly ending talks to gain concessions from the other side,” said OANDA’s Jeffrey Halley. 

“The House Democrats, while open to some direct bailouts of the airlines, have held their ground and tied more stimulus directly to a larger package, rather than a cherry-picking vote-winning approach favored by the president.”

But observers said with Democrats and Republicans about $600 billion apart in the proposals, there was little expectation a deal will be reached before the November 3 polls.

“We are pretty skeptical that you’ll see anything before the election,” Libby Cantrill, at Pacific Investment Management, told Bloomberg TV. “We probably won’t see any additional support for the economy until January 2021 maybe at the earliest.”

Still, investors are growing increasingly confident that Joe Biden will win the White House, with polls giving him big enough leads in battleground states that could prevent Trump from challenging the result—a situation that would fan uncertainty. With AFP

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