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Stock market retreats; PLDT, Ayala Land drop

The stock market declined Thursday as the rally that greeted 2018 gave way to profit-taking.

The Philippine Stock Exchange Index slumped 107.04 points, or 1.2 percent, to 8,813.25 on a value turnover of P7.7 billion. Losers beat gainers, 120 to 88, with 54 issues unchanged.

Major property Ayala Land Inc. fell 2.9 percent to P44.35, while PLDT Inc., the biggest telecommunications firm, tumbled 3.4 percent to P1,400. 

Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, and hospitals lost 3.2 percent to P6.61. Conglomerate San Miguel Corp. bucked the trend, rising 3.1 percent to P132.

The rest of Asian markets saw further losses on Thursday, with Tokyo hit by a weaker dollar and Hong Kong coming off a 12-day surge.

The stronger yen hurt Tokyo-listed exporters, sending the Nikkei index 0.3 percent down.

Hong Kong was slightly lower after an outstanding 12-day unbeaten run, but Shanghai ended up 0.1 percent, pushing a winning streak to 10 straight days.

Sydney and Seoul each lost 0.5 percent, Singapore eased 0.1 percent and Wellington tumbled 1.4 percent.

US traders sent all three of New York’s main indexes falling for the first time this year as they were spooked by a report saying Canadian officials increasingly expect Donald Trump to call time on the decades-old NAFTA free-trade pact.

That came after Bloomberg News said Chinese authorities reviewing foreign-exchange holdings have recommended slowing or halting purchases of US Treasuries.

The greenback sank against most of its peers soon after the news on fears that a huge amount of foreign demand for dollars would dry up.

But it bounced on Thursday after China’s State Administration of Foreign Exchange refuted the report, saying in a statement on its website: “We think this story could be quoting a mistaken source or it could also be a piece of fake news.”

China has long invested heavily in US bonds as a way of controlling the value of its own yuan currency and Bloomberg News estimates it currently holds around $1.2 trillion in Treasuries, an amount that has doubled over the past 10 years.

“US Treasuries are often used during the political ping-pong match when trade tensions escalate,” said Stephen Innes, head of trading for OANDA in the Asia Pacific.

“It’s entirely possible that China could take measure to rebalance their reserve as they have done in the past,” Innes said.

But markets quickly realized “it’s highly improbable China will stop buying US Treasuries”.

Innes added that while the dollar is up against the yen, it is still struggling, “suggesting the market remains on guard against a quicker pace of BoJ tapering.”

The yen was already making inroads against the dollar after the Bank of Japan on Tuesday said it would cut back on its purchasing of bonds as part of its huge stimulus program. 

Oil prices were slightly down but remain at near three-year highs after a recent run-up helped by falling US stockpiles and unrest in key producer Iran. With AFP

Topics: stock market , PLDT , Ayala land
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