Stocks declined Tuesday, as investors assessed the impact of US President Donald Trump’s efforts to rework trade pacts with Asia-Pacific countries.
The Philippine Stock Exchange index, the 30-company benchmark, shed 3 points, or less than 0.1 percent, to close at 7,370.65. Despite the loss, the bellwether was still up 7.7 percent this year.
The heavier index, representing all shares, picked up 1 point to settle at 4,427.30, on a value turnover of P7.9 billion. Advancers outnumbered losers, 97 to 86, while 49 issues were unchanged.
Twelve of the 20 most active stocks ended in the green, led by contractor Megawide Construction Corp. which jumped 6.2 percent to P15.40 and casino operator Bloomberry Resorts Corp. which climbed 3.5 percent to P7.61. Conglomerate Ayala Corp. advanced 2.2 percent to P830.
Meanwhile, Tokyo stocks slipped Tuesday as exporters were hit by a yen rally, fueled by concerns over Trump’s global trade plans and comments from his Treasury Secretary pick over a stronger dollar.
Trump followed up an inauguration speech seen as angry and protectionist by making his first official act the withdrawal from the 12-nation Trans-Pacific Partnership.
He also said he would renegotiate the North American Free Trade Agreement with Canada and Mexico and threaten to impose border taxes, while his chief spokesman warned he would not hesitate to confront Beijing the South China Sea issue.
“If protectionism increases, companies that have been operating on the assumption of free trade until now will have to rethink their policies,” said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities.
“The market is afraid that if President Trump further intensifies his protectionist colours with border taxes, the global economy will start shrinking,” he told Bloomberg News.
The benchmark Nikkei 225 index fell 0.55 percent, or 103.04 points, to close at 18,787.99, while the Topix index of all first-section issues lost 0.55 percent, or 8.30 points, to 1,506.33.
Investors cheered Trump’s November election, hoping he would pursue pro-growth measures such as public works spending, lower taxes and regulatory reforms.
The tycoon confirmed on Monday he plans to pursue those priorities, but markets are growing concerned about his lack of detail and the possibility his tough talk will lead to a trade war.
Japan’s Prime Minister Shinzo Abe, who made the TPP a key part of his economic growth drive, said Tokyo would keep pressing the US on the merits of the agreement.
Other Asian investors also continued to move warily in early trade as they try to gauge what the new administration intends to do.
Mnuchin, who has yet to be confirmed in his role, said Monday in a written response to a senator’s question about a 25 percent jump in the dollar: “From time to time, an excessively strong dollar may have negative short-term implications on the economy.”
“The comments all but stuck a dagger into an already reeling greenback,” said Stephen Innes, a senior trader at Oanda.
Hong Kong edged up 0.3 percent and Sydney added 0.4 percent. Singapore and Taipei were slightly higher but Wellington retreated. With AFP, Bloomberg