Market declines; First Gen up
Stocks fell for a second day, as fears of a global trade war grew when Asian powerhouses China and Japan lashed out at controversial tariffs on foreign steel and aluminum signed off by President Donald Trump.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 9 points, or 0.1 percent, to close at 8,372.51 Friday, as four of the six major sectors declined.
The heavier index, representing all shares, also retreated 12 points, or 0.2 percent, to settle at 5,052.79, on a value turnover of P6.6 billion. Gainers outnumbered losers, 125 to 82, while 54 issues were unchanged.
Six of the 20 most active stocks ended in the green, led by Prime Media Holdings Inc. which jumped 50 percent to P1.68. Power producer First Gen Corp. climbed 7.6 percent to P16.68, while MRC Allied Inc. rose 4 percent to P0.78.
Meanwhile, news that Donald Trump had agreed to meet North Korean leader Kim Jong Un sent other Asian stock markets surging and the yen tumbling Friday.
South Korea said the two leaders would hold an unprecedented summit by the end of May, raising hopes they can broker an agreement on Pyongyang’s nuclear program that has fueled tensions on the peninsula.
A senior South Korean security official said Kim had “expressed his eagerness to meet President Trump as soon as possible”, while the US leader tweeted that “great progress” had been made in persuading the North to end its nuclear program.
The news provided a springboard for Asian markets, with Seoul surging 1.1 percent and Tokyo ending 0.5 percent higher.
Hong Kong added more than one percent, Sydney and Singapore each rose 0.3 percent, and Shanghai jumped 0.6 percent. Taipei, Wellington and Mumbai were also higher.
The development came just months after a period of extreme tension and bellicose rhetoric between Washington and Pyongyang that sounded like the growing drumbeat of war as the North carried out a series of missile and nuclear tests.
“It’s a big deal—there’s no question this is a positive move,” Ian Bremmer, president of Eurasia Group, a political-risk research and consulting firm in New York, told Bloomberg TV.
“But also there is the possibility that it could go badly, that Trump could be embarrassed that they make an agreement that Kim Jong Un could backslide on.”
Hopes that the two could reach some sort of agreement also led to a plunge in the yen, which is considered a go-to safe currency in times of volatility and uncertainty. The dollar jumped to its highest level in a week.
Also Thursday, Trump signed off on controversial tariffs for steel and aluminum imports, which have been met with anger across the world and from within his own Republican Party, while raising the specter of a global trade war.
He said Mexico and Canada had been exempted from the levies while they held talks on a new trilateral free-trade agreement, and invited other countries to discuss carve-outs.
However, analysts warned the issue could still blow up down the road and dealers remain on edge on concerns over a possible trade war, which sparked a global sell-off last week.
Greg McKenna, chief market strategist at AxiTrader, said: “For the moment, fears have been eased in the immediate term. With AFP