Stock market down in thin trading
The stock market slipped Tuesday in thin trading, weighed down by mixed corporate results and lingering concerns on rising inflation.
The Philippine Stock Exchange Index fell 22.30 points, or 0.3 percent, to 7,555.27 on a value turnover of nearly P5 billion. Losers overwhelmed gainers, 113 to 73, with 59 issues unchanged.
Conglomerate JG Summit Holdings Inc. of industrialist John Gokongwei slumped 4 percent to P59.05, while Aboitiz Equity Ventures Inc. dropped 3.1 percent to P59.70.
International Container Terminal Services Inc., the biggest port operator, lost 2.3 percent to P81 after reporting a 15-percent decline in profits in the first quarter of the year on higher expenses from new terminals.
Security Bank Corp., the sixth-largest lender in terms of assets, tumbled 3.9 percent to P189.50.
Oil prices, meanwhile, surged more than two percent in Asia on Wednesday after Donald Trump pulled the United States out of the Iran nuclear deal, fueling fresh geopolitical uncertainty.
Despite the energy sector’s gains, Asian equity markets fluctuated through the day and struggled to keep track.
Tokyo and Hong Kong both ended up 0.4 percent but Shanghai was 0.1 percent lower.
Singapore added 0.2 percent, Seoul was down 0.2 percent while Sydney was 0.3 percent higher. Bangkok fell but Jakarta, Wellington and Taipei were in positive territory.
Both main crude contracts have been rising in recent weeks to reach three-and-half-year highs on expectations the US president would withdraw from the 2015 pact, which opened up Tehran’s atomic program in return for an easing of sanctions.
In an address Tuesday, he said he would pull out of the accord—which was agreed by Britain, China, Germany, Russia and the Obama administration—calling it “defective at its core.”
Iran’s President Hassan Rouhani said the country could now resume uranium enrichment “without limit” but would discuss its response with the other signatories before making a decision.
With the move already priced into markets, WTI and Brent sank soon after the announcement with some commentators suggesting Trump could still pedal back on some of his rhetoric and shift to a more diplomatic tone.
However, they bounced back strongly in Asia and there is talk crude could continue rising to $80 a barrel, with gains helped by uncertainty in oil-rich Venezuela, the Opec-Russia output cap, improving global demand and data pointing to a drop in US stockpiles.
“Given the unilateral move by the US, much of the movement on oil prices had been factored in,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
He said that the market would continue to be supported by other factors, adding that “even without Iran sanctions oil prices will remain firm.”
The hike in oil prices boosted regional energy firms, with CNOOC and Sinopec up more than two percent and PetroChina piling on 4.4 percent in Hong Kong. Inpex added one percent in Tokyo. Sydney-listed Woodside Petroleum and Rio Tinto were also sharply up.