Market slumps; SMIC bucks trend

Stocks fell for a third day, dragging the benchmark index to a four-month low after credit watcher S&P Global Ratings cut its growth forecast for Asia-Pacific for 2019 and 2020 amid the slowing growth in China.

The Philippine Stock Exchange index, the 30-company benchmark, shed 39 points, or 0.5 percent, to close at 7,739.86 Tuesday.

The broader all-share index also tumbled 25 points, or 0.6 percent, to settle at 4,687.04, on a value turnover of P5.4 billion.  Losers outnumbered gainers, 135 to 52, while 50 issues were unchanged.

Data showed that three of the 20 most active stocks ended in the green, led by conglomerate SM Investments Corp. which climbed 1.6 percent to P987.  Property developer Megaworld Corp. rose 0.7 percent to P4.40, while BDO Unibank Inc. gained 0.4 percent to P143.50.

A report published by S&P said Asia-Pacific’s economic slowdown showed no sign of letting up but policymakers in many countries were easing in response.

“We have cut our Asia-Pacific forecasts by 0.2 percentage point to 4.9 percent for 2019, and 0.3 percentage point to 4.8 percent for 2020,” said Shaun Roache, S&P Global Ratings’ Asia-Pacific chief economist. 

“The downward revision for 2019 mostly reflects weaker second-quarter data. In 2020, we now expect growth below 6 percent in China as downward pressure remains unrelenting, and we have revised our forecasts lower for India and South Korea,” said Roache.

Other Asian markets mostly rose Tuesday after Wall Street finished a volatile quarter on a positive note, while China began a week-long break to celebrate the 70th birthday of the People’s Republic.

Following Wall Street’s lead, Tokyo closed 0.6 percent higher, helped by a drop in the yen and as investors shrugged off a Japanese survey that showed business confidence continued to fall.

Buyer sentiment was boosted by comments from the Trump administration denying the likelihood of new US restrictions on Chinese investment, analysts said.

“US stocks rebounded and the dollar topped 108 yen” in a positive development for Japanese exporters, said Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Institute.

Taipei jumped 1.3 percent and Singapore climbed 1.0 percent, with gains also seen in Wellington and Seoul. Bangkok and Jakarta were both down.

Investors are looking ahead to the resumption of trade war talks between Beijing and Washington next week, said Quincy Krosby, chief market strategist of Prudential Financial.

The latest discussions set for Oct. 10 are “clearly a positive for the markets because the effect it has on the world economy is paramount going into the last quarter,” Krosby said.

Markets in China and Hong Kong were closed for a public holiday as anniversary celebrations were held in Beijing and pro-democracy protesters took to the streets in the southern financial hub.

In early European trade London edged up 0.1 percent, and Paris and Frankfurt also made slight gains.

Sydney rose 0.8 percent and the Australian dollar dipped after the Reserve Bank of Australia announced it had cut interest rates to a historic new low.

Amid fears about the flagging domestic economy, the central bank slashed rates by another 25 basis points to 0.75 percent.

Resource-rich Australia dodged the worst of the financial crisis but the economy recently recorded its weakest annual growth in a decade, expanding just 1.4 percent in the year to June. With AFP