The stock market plunged Thursday following losses in Wall Street overnight as trade war fears return to the fore, with worries Donald Trump will go full-steam ahead with his “America First” protectionist agenda.
The Philippine Stock Exchange Index sank 158.73 points, or 1.9 percent, to 8,190.01 on a value turnover of P7.6 billion. Losers beat gainers, 118 to 92, with 47 issues unchanged.
SM Prime Holdings Inc. of retail tycoon Henry Sy Sr. tumbled 4.2 percent to P34, while sister firm BDO Unibank Inc., the biggest lender in terms of assets, lost 3.1 percent to P145.40.
Conglomerate Ayala Corp. fell 3.1 percent to P1,006, while Robinsons Retail Holdings Inc. of the Gokongwei Group slumped 4.8 percent to P87.
The rest of Asian markets, meanwhile, staged a recovery from early losses Thursday but investors stayed cautious.
Investors were back on the ropes after the US said Wednesday it would take action at the World Trade Organization against Indian export subsidies.
That came soon after it emerged Trump is considering tariffs on billions of dollars in Chinese tech and telecoms imports as he takes aim at alleged intellectual property breaches by Beijing.
The news saw a return to volatility after a few days of respite from last week’s controversial announcement of levies on steel and aluminum imports.
Adding to the unease among traders is the departure of market-friendly economics advisor Gary Cohn this month and Tuesday’s sacking of moderate secretary of state Rex Tillerson.
On Wednesday, Trump tapped conservative TV pundit and longtime free-market advocate Larry Kudlow to replace Cohn.
Tokyo ended 0.1 percent higher, while Hong Kong rose 0.3 percent. Seoul and Wellington also closed up, having been down earlier.
But Sydney and Taipei each fell 0.2 percent, while Singapore and Jakarta lost 0.5 percent. Taipei eased 0.2 percent and Shanghai was marginally lower.
Analysts said there is now a growing fear that the White House has set itself on a more hardline course, which could upend global trade as well as impact on key geopolitical issues, particularly the Iran nuclear deal.
Trump is “cleaning house with the establishment picks and putting like-minded thinkers around him,” said Greg McKenna, chief market strategist at AxiTrader.
His “growing confidence”•born of success with tax and hopefully North Korea, among other things”•means he is emboldened to prosecute his ‘America First’ agenda. That means… there is a real risk that a trade war actually breaks out,” McKenna added. “That ultimately can’t be good for growth.”
There is now speculation the president will look to oust other top members of the White House including Chief of Staff John Kelly and Attorney General Jeff Sessions.
All three main Wall Street indexes ended deep in the red, and the selling carried on early in Asia before an afternoon bounce saw losses pared and, in some cities, a return to positive territory. With AFP