Stocks tumbled Friday following a sell-off in New York as Donald Trump sparked fresh trade war fears by imposing huge tariffs on Chinese imports and Beijing unveiled its own measures against US goods.
The Philippine Stock Exchange index, the 30-company benchmark, plunged 153 points, or 1.9 percent, to close at 7,970.80, as all six major sectors declined.
The heavier index, representing all shares, also shed 66 points, or 1.4 percent, to settle at 4,824.16, on a value turnover of P8.6 billion.
Eighteen of the 20 most active stocks ended in the red. Only Jollibee Foods Corp. advanced 0.4 percent to P288, while JG Summit Holdings Inc. closed flat at P63.50. Pilipinas Shell Petroleum Corp. dropped 9.5 percent to P55.55, while Now Corp. retreated 9.8 percent to P8.12.
Most Asian markets also plummeted after President Trump announced levies on up to $60 billion of imports from China for what he describes as the “theft” of American intellectual property, fueling speculation that a strong recovery in the world economy could be thrown off course.
Thursday’s announcement comes just weeks after the White House imposed stinging taxes on steel and aluminum products entering the US—causing equities to plunge—as Trump drives through with his America First protectionist agenda.
China responded by saying it was “not afraid of a trade war”, while it also released a list of potential tariffs on $3 billion worth of US goods, from pork to fruits and wine and including some steel and aluminum goods.
The news boosted Chinese pork producers though Hong Kong-listed WH Group, which owns US giant Smithfield, plunged eight percent.
There was little positive reaction to the US saying late Thursday it would suspend duties on metals imports from the EU, Argentina, Australia, Brazil, Canada, Mexico and South Korea.
Wall Street was sent spiraling by Thursday’s news with all three main indexes shedding between 2.4 percent and 2.9 percent.
And those losses filtered through to Asia. Tokyo was hammered 4.5 percent to hit a near six-month low, with exporters also hit by a surging yen, which is considered the go-to currency in times of turmoil and uncertainty.
The greenback fell below 105 yen for the first time since Trump was elected president in November 2016, while it was also down against the euro and pound.
Hong Kong collapsed 3.4 percent and Shanghai lost 4.2 percent, while Sydney sank two percent.
Hannah Anderson, global market strategist at JP Morgan Asset Management, warned: “The effects are likely to be felt more strongly in the US and increase both consumer and producer prices.
“Exports are extremely important to the Chinese economy, but have been trending less so in recent years and the US has been shrinking as a share of China’s export market.”
She added: “The equity market will bear the brunt of the market reactions. Most impacted will be the US, Korea, and Taiwan as companies domiciled in these markets make up a significant portion of the global production chain of Chinese exports.
“Chinese listed firms, on the other hand, derive most of their sales—around 80 percent—from the domestic market.”
Seoul was 3.2 percent down and Taipei fell 1.7 percent. Singapore dived 2.4 percent, Wellington gave up one percent and Manila dropped 2.3 percent.
Analysts said traders were spooked by the fact China is the biggest buyer of Treasuries, which the US needs to keep its economic wheels greased. With AFP