The stock market fell for the seventh straight session Friday as the prospect of a debilitating global trade war hung over Asia.
The Philippine Stock Exchange Index dropped 34.95 points, or 0.5 percent, to a new 17-month low of 7,063.20 on a value turnover of over P8 billion. Losers overwhelmed gainers, 129 to 76, with 46 issues unchanged.
The market officially entered the bear territory Thursday with a 22-percent drop from its peak in January amid foreign funds outflow on concerns a trade war will erupt between the US and China.
Casino operator Bloomberry Resorts Corp. slumped 5.7 percent to P9.81, while Bank of the Philippine Islands, the third-biggest lender in terms of assets, lost 2.8 percent to P88.
Alliance Global Group Inc. of tycoon Andrew Tan declined 2.8 percent to P12, while Megawide Construction Corp., which just completed the Terminal 2 of the Mactan-Cebu International Airport, also fell 2.8 percent to P21.
Asian investors, meanwhile, ended a tumultuous week on a cautious note Friday.
As European Union tariffs on key US goods—including jeans, bourbon, and motorcycles—came into effect, there were fears China and the US will carry through with their own threats, locking the world’s three biggest economies in a potentially destructive face-off.
The EU move was in retaliation to Donald Trump’s decision to hit steel and aluminum imports from the bloc and comes after the US and China traded tit-for-tat threats on hundreds of billions of dollars of goods.
That exchange sparked an international market retreat and fueled worries a full-blown flare-up could pummel the global economy just as it is getting back on its feet after the global financial crisis.
“We have a trade war—and it’s an escalating trade war,” SEB chief economist Robert Bergqvist told AFP in an interview.
“Investors… are more cautious today, they are waiting for the right time to reduce their exposure in stock markets.”
Tokyo ended 0.8 percent lower and Sydney lost 0.1 percent, while Singapore and Taipei each dropped 0.4 percent.
But after fluctuating through the day Hong Kong was slightly higher in late trade, while Shanghai ended up 0.5 percent. Both markets took the brunt of selling pressure over the week.
Among other markets Seoul rose 0.8 percent, Wellington was flat, and Bangkok pushed higher.
New York’s three main indexes ended down—with the Dow suffering an eighth straight loss—as investors were spooked by news that Daimler had cut its profit forecasts because of new levies on cars exported from the US to China.
“We heard from Daimler about the impact of the trade tensions on sales, and there are a growing number of stories about the chance of China directly targeting US firms who do business in the country,” said Greg McKenna, chief market strategist at AxiTrader.
“What comes to pass is still uncertain in that regard. What’s not uncertain, though, is the resolve of US Commerce Secretary Wilbur Ross to pursue China and try to change it—and other nations’—actions.” With AFP