Stocks fell for a third day, following losses in Asian markets as US-North Korea tensions flared up again after Pyongyang accused US President Donald Trump of declaring war on the country and said it may shoot down US bombers.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 74 points, or 0.9 percent, to close at 8,170.14 Tuesday, as five of the six major sectors declined.
The heavier index, representing all shares, also tumbled 30 points, or 0.6 percent, to settle at 4,831.86, on a value turnover of P9.6 billion. Losers outnumbered gainers, 138 to 63, while 53 issues were unchanged.
Four of the 20 most active stocks ended in the green, led by aviation company MacroAsia Corp. which climbed 7.9 percent to P15.82 and Robinsons Retail Holdings Inc. which went up 5 percent to P100. Bloomberry Resorts Corp. advanced 4.6 percent to P10.80, while BDO Unibank Inc. inched up 0.1 percent to P129.50.
Meanwhile, PXP Energy Corp. plummeted 22.4 percent to P7.69, after accumulating gains over the past several days, while Energy Development Corp. slid 20 percent to P4.80, ahead of its exit from the 30-company PSEi.
Most Asian markets traded lower Tuesday. North Korea Foreign Minister Ri Yong-ho issued comments at the United Nations in response to Trump’s warning on Twitter at the weekend that North Korea “won’t be around much longer” if it continues its threats.
Ri said the regime of Kim Jong-Un had “every right to take counter-measures, including the right to shoot down US strategic bombers even when they are not yet inside the airspace border of our country”.
The comments on the war declaration—described by the White House as “absurd”—are the latest in a war of words between the two sides following the North’s recent nuclear test and missile launches.
While most analysts do not expect a nuclear conflict, China and Russia have been among the countries to express alarm.
“This does represent a significant escalation in rhetoric and raises the risk of a tactical misstep,” Tapas Strickland, a Sydney-based economist at National Australia Bank, told Bloomberg News.
And the concerns are being felt on financial markets, with safe-haven investments rising. Gold was up more than one percent at $1,310, while the Japanese yen recovered recent losses against the dollar.
Tokyo’s Nikkei index ended 0.3 percent lower, while Seoul shed 0.3 percent and Hong Kong was down 0.2 percent in the afternoon.
Sydney, Singapore and Taipei were also in the red but Shanghai eked out minor gains.
In early European trade, London fell 0.2 percent and Paris lost 0.1 percent while Frankfurt retreated 0.3 percent.
On currency markets the dollar struggled to recover from its New York losses and was sitting around 111.50 yen, well off the levels around 112.50 yen seen in Tokyo earlier Monday. Adding to the greenback’s weakness were conflicting comments from top Federal Reserve officials over the timing of the bank’s next interest rate rise.
The euro was also on the back foot after European Central Bank boss Mario Draghi aired concerns about its recent strength and hinted that policymakers could keep monetary stimulus for some time as the eurozone economy recovers.
And while German Chancellor Angela Merkel won a fourth term as leader of Europe’s biggest economy, her declining share of the vote and the need to build a coalition government have left investors uneasy. With AFP, Bloomberg
