Stocks decline; RCBC, Cemex up

Stocks retreated amid thin trading Monday after a long break, as tensions on the Korean peninsula weighed on sentiment across Asia.

The Philippine Stock Exchange index, the 30-company benchmark, shed 41 points, or 0.5 percent, to close at 7,588.53, as all six sectoral indices declined.  Despite Monday’s loss, the bellwether was still up 10.9 percent this year.

The heavier index, representing all shares, also lost 22 points, or 0.5 percent, to settle at 4,530.50, on a value turnover of P4.4 billion. Losers outnumbered gainers, 106 to 74, while 50 issues were unchanged.

Nine of the 20 most active stocks ended in the green, led by MRC Allied Inc. which surged 10.3 percent to P0.32 and Rizal Commercial Banking Corp. which climbed 8 percent to P42.10.  Cemex Holdings Philippines Inc. rose 3.8 percent to P8.22

Meanwhile, Asian stocks were mixed as many markets reopened after the holidays with investors assessing geopolitical risks.

Tensions between Pyongyang and Washington have soared in recent weeks as a series of North Korean weapons tests have wrought ever-more bellicose warnings from US President Donald Trump’s administration.

During a visit to the heavily militarized border between the two Koreas, Vice President Mike Pence said America was ruling nothing out in its dealings with the hermit state, a day after Pyongyang failed in its attempt to test another missile.

Trump last week ordered a naval strike group led by the USS Carl Vinson aircraft carrier to the region, though the vessels remain a long way from the peninsula.

Tokyo stocks led markets lower—extending four days of losses—as the growing tensions stoked demand for the safe-haven yen.

A stronger yen is generally bad for Japanese shares as it dents exporters’ profitability.

“Geopolitical risk will continue to be closely monitored today as a strapping US Navy Armada moves within striking distance of North Korea,” said Stephen Innes, senior trader at forex firm Oanda.

“With all the military adventurism in play, those insidious wartime market correlations take force as the risk-off theme grips markets. To what extent the markets need to price in geopolitical risk more actively into their psyche will likely drive nearer term sentiment.”

The benchmark Nikkei 225 index, which closed at a 2017 low on Friday, lost another 0.3 percent by the lunch break.

Taipei also fell 0.3 percent, while Jakarta dropped 0.2 percent and Singapore declined 0.8 percent.

Hong Kong and Sydney were closed for a holiday. 

China markets also declined despite government figures showing signs of stabilization in the world’s second largest economy.

Growth of 6.9 percent for the first quarter of 2017 was better than the median analyst expectation of 6.8 percent in an AFP poll.

“The national economy in the first quarter has maintained the momentum of steady and sound development,” the National Bureau of Statistics said in a statement.

It added that “positive changes kept emerging and major indicators performed better than expected”.

The economy grew 6.7 percent in 2016, its slowest rate since 1990.

The government has trimmed its 2017 GDP growth target to “around 6.5 percent” as the economy faces an array of challenges. With AFP, Bloomberg

Topics: Stocks , RCBC , Cemex
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