The stock market fell slightly Friday in cautious trading, with investors digesting the latest policy adjustment of the Bangko Sentral ng Pilipinas and the weak first-quarter GDP numbers.
The Philippine Stock Exchange Index slipped 13.42 points, or 0.2 percent, to 7,742.20 on a value turnover of P7.6 billion. Losers beat gainers, 101 to 78, with 64 issues unchanged.
The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, on Thursday reduced the overnight borrowing rate by 25 basis points to 4.5 percent, the first time in more than six years, after inflation rate eased to the target range and economic growth decelerated to a four-year low.
The board made the adjustment hours after the Philippine Statistics Authority reported that the growth in the gross domestic product decelerated to a four-year low of 5.6 percent in the first quarter from 6.5 percent a year ago, weighed down by the delayed approval of the 2019 government budget.
Aboitiz Equity Ventures Inc. declined 5.1 percent to P48.60, while PLDT Inc., the biggest telecommunications firm, lost 3.9 percent to P1,240.
Cemex Holdings Philippines Inc. jumped 11.3 percent to P2.65, while Holcim Philippines Inc. advanced 6.1 percent to P15.30, after San Miguel Corp. acquired an 87.5-percent stake in the local unit of Switzerland-based cement giant Lafarge Holcim.
Shanghai, meanwhile, led gains across most Asian and European markets Friday at the end of a torrid week for equities, with investors keeping a nervous eye on China-US trade talks after Washington more than doubled tariffs on $200 billion of imports.
Shanghai, which lost more than seven percent from Monday to Thursday, ended up 3.1 percent, while Hong Kong piled on one percent in the afternoon.
Sydney and Singapore each added 0.3 percent, while Seoul was up a similar amount as investors brushed off news that North Korea had tested a long-range weapon, which is likely to raise tensions after the breakdown of de-nuclearization talks with the United States. Mumbai added 0.2 percent.
But Tokyo finished down 0.3 percent, while Wellington, Taipei, Jakarta and Bangkok also fell.
Equities started the day on a high as dealers took heart from positive comments from Donald Trump on the prospects for a deal but the region turned negative as the threatened levies kicked in and China vowed to hit back, saying it “deeply” regretted the US move.
However, Shanghai and Hong Kong bounced back on hopes the economic superpowers will be able to reach a deal to avert a trade war that most observers warn could shatter global growth and batter markets.
The tariffs came in after the first day of high-stakes negotiations in Washington between Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
After a week in which trading floors have been a sea of red, regional equities were given a lift by Trump saying he had received a “beautiful letter” from China’s Xi Jinping and that it was “possible” to get a deal. With AFP