Market falls for fifth straight day

The stock market tumbled Wednesday for the fifth straight day ahead of the Monetary Board meeting late in the afternoon, even as the threat of a China-US trade war hangs over markets.

The Philippine Stock Exchange Index dropped 50.99 points, or 0.7 percent, to a near 16-month low of 7,261.62 on a value turnover of P5.3 billion. Losers beat gainers, 103 to 92, with 45 issues unchanged.

The index is now close to the bear territory. A bear market occurs when the index declines 20 percent from its peak of 9,058.62 on January 29, 2018, or to 7,246.90. 

Aboitiz Equity Ventures Inc., which is into power generation and distribution, banking, infrastructure and flour milling, declined 3.9 percent to P59.75, while Jollibee Foods Corp., the biggest fast-food chain, lost 1.8 percent to P279.

BDO Unibank Inc., the largest lender in terms of assets, fell 1.2 percent to P129, while Bank of the Philippine Islands, slipped 1.2 percent to P91.

The rest of Asian equities rose Wednesday on bargain-buying after the previous day’s battering, but investors remain anxious as the threat of a China-US trade war hangs over markets.

Hong Kong was up 0.8 percent in the afternoon after dropping 2.8 percent Tuesday, while Shanghai ended up 0.3 percent―a small dent in the previous day’s 3.8 percent loss.

Tokyo ended 1.2 percent higher while Sydney gained by a similar percentage, Singapore added 0.7 percent and Seoul put on one percent. There were also gains in Wellington, Taipei, and Bangkok.

Shanghai and Hong Kong bore the brunt of the sell-off Tuesday after Beijing warned it would retaliate in kind to Donald Trump’s threat of tariffs on hundreds of billions of dollars’ worth of Chinese goods, amounting to much of its exports to the US.

The standoff follows weeks of fruitless talks between the world’s two biggest economies, with the White House accusing China of a string of unfair practices including cyber-theft and forced technology transfers that are hurting American jobs and companies.

Tuesday’s developments surprised many traders who had characterized Trump’s protectionist rhetoric as part of a strategy to get a better deal from China.

Trump senior economic aide Peter Navarro continued the forceful language Tuesday by saying China had more to lose from a trade war because it shipped more to the US.

He also maintained the administration was acting “to defend the crown jewels of American technology from China’s aggressive behavior”.

Navarro said the White House was open to talks but warned: “The fundamental reality is talk is cheap. Delay is expensive.”

“Markets are faring much better as investors’ emotions have tempered, but in general, markets remain in wait and see mode,” said Stephen Innes, head of Asia-Pacific trading at OANDA. “Clarity is power but given the lack thereof, it’s a struggle to get back in the saddle as a sense of once bitten, twice shy continues to permeate.

“The spoils of trade war have attracted bargain-hunting but completely trusting the markets in the aftermath of yesterday’s meltdown is bordering on too soon, too quick as sentiment remains very apprehensive.” With AFP

Topics: stock market , Monetary Board , Philippine Stock Exchange Index , Aboitiz Equity Ventures Inc. , Jollibee Foods Corp.
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